It's going very poorly for the NCAA (as was expected).
Jim Delaney (the commissioner for the Big 10) was on the stand, and basically said that paying players would end the Rose Bowl. He actually said that a pay-to-play system would kill his conference. Now, I do believe it could jeopardize some of the small conferences, but the Big 10? No way.
Anyway, I still don't really know what this case will mean for the NCAA going forward, but it's pretty easy to predict they will lose this case.
I think the NCAA could contain the fallout by making a few changes:
1. Multi year scholarships. Instead of the year-by-year crap.
2. Scholarships that actually cover the cost of attendance.
3. Allow players to work in the off season.
4. Reduce the time athletes must spend practicing/film study, etc.
I think those four changes would go a long way in putting this issue to rest, but a lot more will need to be addressed in the long term.