I heard about the Phantom Edit on the radio recently. CBC, As it Happens, maybe. All Things Considered did a segment on it last July.

There was an article in Salon as well. It also reviews the cut.

I thought the editor was interviewed in the one I heard, but I may have mis-remembered. According to Salon it was not Kevin Smith. All sources agree that the original edit was done by a fan for fun & not to make money. Distribution has been free, or maybe cost of the disc.

This is what Salon says about the Lucasfilm response: Meanwhile, the responses from Lucasfilm spokespeople began turning from amiable to intimidating. Back in mid-June, Lucas spokeswoman Jeanne Cole told Zap2it.com, "When we first heard about the [reedits], we realized that these were fans having some fun with 'Star Wars,' which we've never had a problem with. But over the last 10 days, this thing has grown and taken on a life of its own -- as things sometimes do when associated with 'Star Wars.'

"And, when we started hearing about massive duplication and distribution, we realized then that we had to be very clear that duplication and distribution of our materials is an infringement. And so we just kind of want to put everybody on notice that that is indeed the case."

The Phantom Editor has supposedly apologized as well.

It doesn't sound like anyone has actually been sued over it, but distribution is technically illegal.