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All of these developments have indeed been quite interesting, from a Hollywood observer's perspective as well as a Tolkien fan perspective.
Presumably New Line has what's called an "option" on The Hobbit. This is where you pay a small sum (smaller than you'd pay for outright purchase anyway, obviously) to acquire rights for a limited amount of time. These deals can be structured any way you want, but the typical option term is for a year. Often the party that holds the option can renew for another term when the option expires, assuming both the underlying rights holder and the optioner are both amenable -- some people make more money by having options renewed over a span of time than they do on outright sales of material. Presumably New Line has been paying rent as you say on The Hobbit for years. This talk of reversion is an interesting development though. It is clearly a threat on Zaentz's part that he won't renew when the option expires.
For New Line's part, that means the clock is ticking. Like I said, there is no boilerplate option -- they can be structured in many ways -- but probably New Line needs to get a greenlit picture before the option expires or rights would revert to Zaentz, who then is as free as a bird to shop his project elsewhere. But -- how can they move forward when things are still unresolved with MGM? Perhaps they made a play to pressure Jackson to commit so that, with a project that was really happening, MGM would be more inclined to come to terms. A bird in the hand and all that.
I'm even more puzzled by Jackson taking things public. Chances are he has a legitimate suit. Unfortunately, it's pretty much standard practice for studios to try to cheat profit participants out of their due. I also wouldn't be surprised if making a new deal to help resolve the suit really is "how things are done". With that in mind, I guess there are at least a couple of reasons for going public. The cynic in me wonders if Jackson was looking for an out and found it. He's able to walk away from the project with creative integrity intact and New Line looking like the bad guy. The flip side of the argument he's made on TORN is that if he was really passionate to make The Hobbit, he wouldn't let a compromise over money stand in the way.
On the other hand, this may be Jackson and Zaentz's way of playing hardball with New Line (does Zaentz also still have an unresolved suit with them over profits?). They know that the biggest obstacle for New Line if they lose Jackson and their option can't be renewed is time -- the time it would take for a new director and creative team to come aboard and develop the project into a go movie. All this with the MGM tangle still unresolved, too.
Verrry interesting. Anyway, I wouldn't count anything out yet. I'd say Jackson is still as likely as not to direct a Hobbit movie if he still wants to. We'll see how things play out.
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