Finally friction evolved into a full scale split and now the open source developers have split from the Mambo source tree to create Joomla!, a completely open source branch of Mambo. Right now these two trees are completely the same (save for some aesthetic changes) but it looks like their development paths will be completely separate. This equates to a lot of confusion in the community as to what will happen with all the different plugins and how they will or will not be compatible between the two systems. At the moment we can only wait and see.
I would like to see the Joomla! developers create a more CSS friendly system as at present the underlying code behind Mambo is pretty ugly in parts. At the moment there is MamBoX which complies to XHTML strict but it is running well behind the current version of Mambo in terms of features and polish.