Tom says:
"Problem is the market. The "chicken and egg" problem the author refers to is a real one. You aren't going to sell to a low-cost payload market until the vehicle is built and flying. And the high cost market (comsats and other multimillion dollar satellites) frankly doesn't give a rat's rump about launch costs in their big financial picture."

This is not true. These guys were interested in using Russia launch, and that fact these launches were cheaper is about the only thing going for them. I would say that the price is the most important, next, availablity- get a launch when they need a launch. The safety record of rocket is also important- it the rocket can't be insured, then it's not cheap nor "available". If it can be insured, then there is the cost of insuring- the higher the risk, the higher the cost. And if rockets fails, then "availablity" of another launch & having a replacement satellite ready becomes a even larger factor, because they have prepared for the first launch, and they are counting on it being there in order to make them money. So the higher the risk of blowing up a rocket, and more backup preparation is REQUIRED- meaning perhaps launching before the time, the satellite is needed, and having lot's of replacement satellites.
I think that satellite maker/users would be very interested in low risk, cheap, and low waiting time for their launches. Having CATS would affect the type of satellites they make- would lower the cost of the satellites they make- might buy more satellites which cheaper and more disposable.

Tom says:
"Unfortunately, Rutan's is not one of them, unless he has another surprise in the hangar."

I don't understand, isn't Rutan competing? I heard of his problem with getting a licence. I believe wasn't going to go that route, but then changed his mind, and is pursuing FAS licencing, but that might delay the process. Also:
"SpaceDev has developed small hybrid rocket motor technology for the National Reconnaissance Office, is working on a Shuttle and EELV compatible intelligent “space tug” based on hybrid technology, for the Air Force, and continues developing its larger hybrid motor in competition for Burt Rutan’s historic private manned space program, SpaceShipOne."
http://www.spacedev.com/newsite/templates/subpage_article.php?pid=428
Does that mean SpaceDev is no longer competing for this engine contract?