As Richard Nixon famously observed, it's not the crime that does you in; it's the cover-up. For reasons that have not yet been made clear to the public, Fitzgerald decided not to charge Richard Armitage, Ari Fleischer or Karl Rove with leaking Valerie Plame's name to the press, even though they have all now admitted doing so. Perhaps Fitzgerald concluded that they did not thereby break the law. In any event, in keeping with the pattern in cases of this sort (think Martha Stewart, Bill Clinton's impeachment, etc), the case Fitzgerald did bring charged lying to investigators. Conventional wisdom holds that prosecutors bring obstruction/lying cases because they're often easier to win than charging the underlying offense. But should Libby's defense prevail, that might challenge the conventional wisdom.
When a defendant is charged with lying to the FBI, to a grand jury or to other investigators, one way he can deny the charges is by showing that the underlying statement is true. Libby's gambit is a variation of the George Costanza dictum: "It's not a lie, if you believe it." By admitting that his statement was or may have been false but claiming that he believed it, Libby makes the case about his subjective mental state. And while subjective mental state can be proved through objective evidence, that's not always so easy.
The puzzle, then, is why Libby isn't testifying. He doesn't have any prior convictions that would come in for impeachment. And while the jurors will be instructed not to draw any adverse inferences from Libby's failure to testify, they've got to be wondering why he doesn't get up and say, point-blank, "I thought what I said to the FBI was true. I guess I might have remembered incorrectly." Presumably Ted Wells, Libby's lawyer, thinks that his credibility would be damaged by cross-examination. Which leads those of us in the observing public---who are not governed by the Rules of Evidence---to wonder whether Libby was deliberately lying to the FBI after all, and not just failing to remember. For if that's true, and if Wells knows it, he can't put Libby on the stand. To do so would be to suborn perjury.