A federal judge has ruled against Don't Ask, Don't Tell. Given that the Obama Administration has not and will not be able to get the policy changed via legislation (due to an out of touch Congress), it would seem that that the best course of action is to let this stand rather than appeal. Thus far, the Obama folks have defended a bunch of policies that they originally seemed to oppose. This time, just maybe, they can let a good decision stand.
I will be very confused if the Obama legal folks choose otherwise.