The latest episode of the FIDE-Ponomariov soap opera ran yesterday, with FIDE replying to Ponomariov's letter. FIDE is clearly winning the battle if you go by word count.
One thing that is finally clear to me from this latest document is that the Kasparov-Ponomariov match is to be played for the FIDE world championship title. At first that seems to give more weight to Pono's arguments, which are mainly that he should get draw odds as defending champ and that they should play at the FIDE time control under which he won the title.
The contradiction is that there weren't any draw odds in the event under which Pono won the title, or any plans to give a defending champion any such special treatment. And if this match is part of a classical chess unification plan, after which world championship chess will continue to be played at classical time controls, there is no reason to have this match at the knock-out time control (may it rest in peace).