Greg:

I think the most detailed description of TrustedDWG that I've seen is in the original Autodesk complaint [1] in section I, item 12, where they say that "the program inserts into the file an identifying watermark and a proprietary string of code", and "the watermark and the TrustedDWG code operate as a digital certificate of authenticity".

I don't remember where I heard this and a brief search didn't turn it up, but somewhere I read that the actual text that AutoCAD displays at the command line is part of the TrustedDWG "code" that is embedded inside the DWG file. It may be that the text is embedded, but I doubt that AutoCAD displays the embedded text verbatim (for one, embedding English text and displaying it verbatim would create localization problems). Some people apparently believe that it is this literal embedded text that constitutes the trademark infringement. I believe Autodesk is claiming that the deception experienced by the AutoCAD user upon opening a "spoofed" file is what constitutes the trademark infringement, but there is sufficient latitude of meaning in Autodesk's claim so as to make this point uncertain.

I'm sure there are some folks reading this from both sides that could answer your questions definitively, but unfortunately they probably aren't able to share what they know. I'd like to know more about the technical details of TrustedDWG myself, so if anyone can add to this discussion, please pipe up. :)