Get out the butter and jam because reunification is toast, at least for 2003. Kramnik-Leko is still vapor and both are playing in Dortmund at the end of July. Reports say Kramnik has already agreed to play in Cap d'Agde in October, when a unification match was supposed to occur. The second cycle was supposed to start in December. What will we have now?
We are back to 1998-1999, when Kasparov couldn't get a title match together and the FIDE title was the only one in town. The chess world more or less waited for Kasparov-Kramnik 2000 because 1) Kasparov was clearly the world's top player and 2) the FIDE system was not satisfactory to many. Kramnik might be hoping to emulate that scenario, but he's out of luck on at least one count in comparison, and maybe both counts.
The winner of the Kasparov-Ponomariov FIDE title match in July will either be the world's number one player or someone who beat the world number one in a 12-game match. If FIDE then holds a qualifier in December and begins candidate matches, a legitimate system with a legitimate champion will be in place and Kramnik will be out in the cold unless he plays.
All that would be particularly horrible for Peter Leko, who won a very tough qualifier last year and is playing the best chess of his life. If his match doesn't happen because Kramnik wants more money, should Leko be allowed to play in the unification match?! If the Kramnik-Leko match does occur the winner still needs to get to the board in a unification match, which will be even harder if the second cycle has already begun.