I have long believed that filming police officers and other authorities is legal. Considering how easily authority gets out of hand, I could make a case for it being a citizen's duty to watch the police.
The only other problem is how long this took. The original filming was in October, 2007; the lawsuit just settled was filed in February, 2010. That's more than a year to admit that watching the watchers is not criminal.
And it's not really even over yet. They've only settled that filming doesn't expose an officer to harassment, nor causes him to be personally liable for reasonably performing his public duties. The police can still appeal on other grounds.