Arlonet Comments
For some reason I thought there would be higher traffic on Arlonet (Arlo Guthrie's message board) regarding the JibJab issue. As of now, I've found three comments on JibJab. gbullough notes the following:

Why don't they do something like sue everyone who fails
to perform the last verses of the song. That does one helluva
lot more damage to the song than any parody ever could.
If you don't sing the song about the relief office and the
'no trespassing' sign, you transform 'This Land is Your Land'
into not much more than 'God Bless America.'

As I previously mentioned, Bad Culture reproduced those last verses (taking them from Arlo's website).

gbullough continues:

And Ludlow knows good and well that this would be nothing but a
SLAPP suit anyway...parody is protected under copyright
law, and this is ESPECIALLY so when the parody is political
commentary.

I was going to post a response on Arlonet, but it would require me to set up an account there (and I have too many accounts already). So, here are my two bits:

Although TRO doesn't have a legal case against JibJab, they could have a moral case if JibJab had done a poor-quality parody. However, the level of detail in the JibJab parody is absolutely astounding, including:

Heinz kethcup bottles
The Fox News Channel parody (Big News Channel)
Howard Dean's joyful shriek
Numerous other parodies (Mal Mart, Big Buy, Big Mart, Nexxo, Mendy's)
Bill Clinton's appearance

Of course, before you buy my review, note that I praise Beavis and Butt-Head's video reviews...