(FORTUNE Magazine) - The business trial of the century, starring former Enron CEOs Ken Lay and Jeff Skilling, is now in full swing in Houston, and the media frenzy has muted.

The long line of satellite trucks outside the federal courthouse has disappeared; inside Courtroom 9B there are now plenty of seats. The case has started to settle into an extended daily yin and yang of testimony and cross-examination--but some intriguing undercurrents have begun bubbling up.

Defendants Ken Lay (left) and Jeff Skilling, in better times.

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On Feb. 6, Mark Koenig, Enron's former investor relations chief and the government's very first witness, is enduring a day of grueling cross-examination. After an emotional moment in which Koenig, under aggressive questioning from lead Skilling defense attorney Daniel Petrocelli, briefly teared up as he started to recount having to tell his children that he was guilty of a crime, the judge called a ten-minute recess. As everyone rushed out of the courtroom, Skilling's wife, a former Enron corporate secretary who'd worked with Koenig, burst into tears. After walking her out, Skilling, exiting the courtroom behind Koenig, muttered, "Asshole!"

This, at least, is the story as reported to prosecutor Kathy Ruemmler by someone near the two men. (Koenig apparently did not hear this remark.) At the end of the same day a court officer also approached Ruemmler to tell her about what he viewed as a possible attempt at witness intimidation--he said he had seen Skilling gesturing and mouthing things at Koenig during his testimony. By then a third courtroom source had told Ruemmler that Skilling had been seen mouthing "son of a bitch" at Koenig during his testimony for the prosecution.

Petrocelli acknowledged to FORTUNE that Ruemmler, deputy director of the Enron Task Force, had raised a concern about his client's behavior. But he said that it was untrue Skilling had said anything to Koenig--and that he had told that to Ruemmler. "[Skilling] made no comment, and I didn't know what they were talking about," says Petrocelli. Not only did it not happen, but it could not have happened, because he was never in the same space with him." As for the report about gestures and mouthed remarks in court, Petrocelli called them "absurd" and "irresponsible for anybody to report, in my view, other than to attempt to prejudice Jeff."

In front of the jury, civility--or at least the appearance of it--reigned. On Feb. 14, after days spent trying to skewer Koenig, Petrocelli offered this final word as Koenig finally prepared to step down from the witness stand: "I just want to say, on behalf of Jeff Skilling, we wish you all the best."

Petrocelli tells the jury that with the exception of Andy Fastow and two of his deputies, no one at Enron committed crimes--not even the 13 other people who have pleaded guilty and may testify for the prosecution. The theory here is that they succumbed to government pressure, for fear that if they were convicted at trial, they would face long jail terms. Thus, the defense argued, they were motivated, under their cooperation agreements, to lie about Lay and Skilling to please the government and minimize their jail time.

And so the court has been treated to a weird inversion of accusation: Petrocelli telling Koenig he didn't do anything wrong, with Koenig insisting that, no, he really did do something wrong.

Several days of the early testimony--it seemed like weeks--were dominated by the defense's forcing everyone to sit through entire video- and audiotapes of Enron employee meetings and analyst conference calls. The apparent strategy here is to show Lay and Skilling discoursing authoritatively, reinforcing the defense's theme that Enron was a real company, with a big, complex business that couldn't be dismissed as just a fraud. But there were moments when it seemed the strategy might backfire--Skilling's taped remarks were boosterish almost to the point of self-parody. Listening to a quarterly conference call, one reporter joked that if we had a drink every time Skilling said "outstanding," we would all have had to stumble out of the courtroom dead drunk.

From the opening statements, the defense sticks to the same argument that Enron used in its heyday--that Enron was not a trading company that profited from swings in energy prices, but rather a "logistics company" that earned a steady, predictable margin based solely on the volume of business it did.

But both Koenig and Ken Rice-- Enron's erstwhile broadband chief--testified that this was nonsense. (The "logistics company" mantra was a running joke on Enron's trading floor.) The prosecution introduced a document showing that Enron's trading arm had made $485 million in a single day in December 2000--and lost $551 million a few days later. Rice described how Skilling convened a meeting of executives in 1999, and asked them to dream up a new way of describing the company that would exclude the word "trading"--so Wall Street would give Enron a higher multiple.

The defense argues that Enron disclosed everything necessary to Wall Street. And that besides, Wall Street analysts were far too astute to be fooled--that they diligently scoured Enron's SEC filings, hunting for red flags, only to discover ... a squeaky-clean corporation. Analysts may indeed have seen nothing wrong, but that could be because they didn't look very hard--which may cause problems for prosecutors. They didn't add up all the numbers, and when they actually asked tough questions (a rare occurrence), they were content with unresponsive answers. As Alfred Harrison, Alliance Capital's vice chairman, told the Wall Street Journal shortly after Enron's bankruptcy, "Nobody except very smart short-sellers dug into all the footnotes that might have been there."

It's embarrassing to sit in the courtroom and listen to the analysts fawn all over Skilling on Enron's conference calls. ("Great quarter, Jeff.") And while most of the tapes show analysts lavishing praise on Enron, the legendarily disastrous call of Oct. 23, 2001, made clear that the analysts came to believe that they'd been deceived. "There is an appearance that you're hiding something," a Goldman Sachs analyst could be heard to say, "that maybe there's something beneath the surface going on that is less than--that may be questionable."

Well, he got that right.

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REPORTER ASSOCIATE Doris Burke contributed to this article.