AP has reported that the Senate 12 have brokered an 11th hour deal to avert a showdown over the nuclear option.
The deal announced by Senator John McCain preserves the Democrats right to filibuster, but gives Priscilla Owen, Janice Rogers Brown and William Pryor a vote on the Senate floor.
If the early blogosphere feedback is any indication, the Right and Left share a common sense of rage and betrayal at the outcome:

• "Cowards. A Bunch of M-Fing Cowards!!!! "Trust"? This Is A Nightmare." (Ankle-Biting Pundits)
• "'Bipartisan' Group Caves To Liberals" (Ace of Spades)
• "Disappointing, I'm Afraid" (Powerline)
• "I don't know about you, but I don't like it." (Atrios)
• "Beating Frist on the procedural vote may've been the best option. But the worst option was too horrible to contemplate." (DailyKos)
• "The Dewine Caveat" (Think Progress)

For the right, Bill Frist missed a golden opportunity to enshrine a conservative judicial future and to castrate Democratic opposition in the Senate. For many Democrats, this tenuous deal depends on the good faith of a set of Republican counterparts like McCain and Lindsey Graham, certainly not the safest position to be in. As a matter of principle, the Democrats now face the prospect of accepting previously unacceptable judges.
We may, and in fact likely will, see this battle repeated soon, given the GOP's track record. However that plays out, there is one certain loser today: Bill Frist. His 2008 presidential primary campaign is about to see the hellfire of religious conservatives like James Dobson and Tony Perkins rained down upon it.
UPDATE: Crooks and Liars has an excellent summary of the firestorm of reaction from across the political spectrum. Here's the PDF of the Memo of Understanding signed by the Gang of 14 is here.