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I can't comment on the legal stuff, and I can't say much about the technical side without looking at code, but I can say that those quoted emails hardly amount to admission of wrongdoing in my opinion.

Variable names and similarity of user interface are not evidence that literal and non-literal elements were stolen - to me that sounds like saying to an archtitect that he/she can't use a set square and a tilting table to design a house with four walls and a roof without violating IP. We're talking about an industry with a lot of accepted best practice in these matters*. I wouldn't be convinced by anything less than large chunks of near-identical code or replication of significant novelty in the application architecture. User interface similarity doesn't cut it at all, such things are easily reverse engineered.

It's possible that the emails are not cited as admission of reuse of variable names and user interfaces, but as admission that the commercial product vBadvanced Gallery was developed as an incremental adaptation of All Enthusiasts' product. I don't buy that either. The emails are perfectly compatible with a development process that started with incremental adaptation, but at some point prior to turning it into a commercial product the Photopost code was ditched altogether and the application rebuilt from scratch. Doing this sort of thing is quite common - it can be both easier and more intellectually satisfying to rebuild from nothing. Part of the art of programming is judging when to adapt and when to start again.


*OK, so best practice isn't always followed very well, there's plenty of messy code and non-intuitive interfaces out there, but the practices are established IMO.