I think that dropping the case entirely would make for a lot of eggfaced government, who are after all the NPA's bosses. That said, they know they're sitting on a powder keg with this whole song and dance routine. Personally I reckon they will go ahead with new charges.
The choice of a successor is still a bit murky, and the ANC themselves have come out with conflicting statements, saying that any leader is voted in by the National Executive, who in turn take their tips from the electorate, or that there is no succession debate because the party will go with whoever represents the best choice in terms of upholding the party's beliefs and values. There is no clear frontrunner at this stage, although current Secretary General Kgalema Motlante's name has been in the news lately. One thing's for sure, whoever it is has to have a combination of Mandela's charisma and Mbeki's business sense. Anything less would cause the rifts in the party to degenerate into a split, which is unthinkable at this stage but may be unavoidable unless the candidate can unify the party faithful.
Tough job, that.

The force is strong with this one...