The three options listed were increase the magnetic field of disc holder (rejected because it would interfere disc opening and closing mechanism), slowing disc rotation speed (would have slowed game loads) and installing small bumpers (would cost an additional $35 to $75 million). According to the document, Microsoft's solution of appending the manual and offering a disc replacement program was deemed insufficient by company employees via an internal email. The plaintiffs are still seeking class action status while Microsoft hopes the courts will end up disc-arding the whole issue (har).
[Via X3F, SeattlePI]
Read - Plaintiffs' Motion for Class Certification (PDF File)