I don't recall the incident that precipitated this case at all, perhaps because "almost nobody visited the blog" in question (and it seems to have disappeared). And the Phantom Observer is the only blogger that seems to have reported on it back in March. Note that this guy is not Allen Varlaki, who once suggested that Harper should have to "take a bullet", although the two incidents both took place in March '07.
But the bottom line seems to be that death threats uttered in the direction of famous people are okay in the context of satire:
....the blog entries were the result of a creative process where he would write as the angry and disillusioned character, Drunken Soldier, poking fun at the idea of blogging and current events.
But of course one can also satirize the non-famous. What happens when you began to issue fictitious death threats against a fellow blogger or the girl who won't go out with you in college?