It seems fairly clear now that Guttenberg's dissertation is a patchwork quilt, with some passages lifted verbatim and some rewritten to hide the lifting – and possibly with some passages being original work, though that honestly remains to be seen. We started out with a mere 12 passages of directly lifted paragraphs with no source attributed.
My favorite part of the story was Guttenberg's statement for the press (full text here):
"Jede weitere Kommunikation über das Thema werde ich von nun an ausschließlich mit der Universität Bayreuth führen."
"Starting now, I will only answer questions about this issue exclusively with the University of Bayreuth." Good luck with that, Karl-Theodor...
The CDU/CSU – Guttenberg's political party – believes all of this is a political campaign and charges that their political opposition is rushing to conclusions that only the university that awarded the doctorate can draw. But I no longer believe that "guilty until proven innocent" holds here. This is not a case of he-said/she-said where the public doesn't have all of the facts, and the court will have to decide after careful consideration. I work with texts every day and would never hand in work that looks like Guttenberg's.
The question is what the outcome will be. Different polls in different media show alternately that a majority of Germans want him to stay and want him to go, so we will have to see how that opinion looks when it stabilizes.
There is reason to believe both that other scandals are to come and that the case will blow over completely. Germany's Family Affairs Minister is now also charged with abusing her resources as a member of Parliament to facilitate the writing of her dissertation; Guttenberg apparently also had a study conducted by his office, and that study was partly lifted for his dissertation. It may turn out that such practices are quite widespread.
Incidentally, German professors are themselves notorious for having their "HiWis" (assistants) collect raw data and, in the worst cases, actually do some of the writing later published exclusively under the professor's name, but that practice also extends into the publishing world. I have been warned a few times to avoid collaborating with this or that US author because they tend to take your work and publish it as their own. So perhaps all of this exists on a seamless spectrum of practices in the publishing world.
Back in 1994, a book was published with the title "Dimwits from Bonn – the dissertations of Germany's elite." I haven't read the book, but it basically collects passages from dissertations written by Germany's top politicians of a few decades ago and shows how vapid they are. The charge in that book was apparently not plagiarism or abuse of parliamentary resources per se, but rather that Germany's elite can apparently turn in just about anything and get a doctorate for it.