The software in question they are upset over is Google Apps, and even more in particular gMove, an import tool provided for people coming from Outlook. It seems that originally LimitNone was developing such a tool, and was receiving help from Google in deploying and selling it. According to them, the terms of the deal prevented Google from competing with their $19 per license software, with Google promising upwards of 50 million potential buyers. Of course, Google Apps offers such functionality for free – much to the chagrin and potential dollar loss for them.
Google isn't commenting at this time, which is pretty much expected. LimitNone is also upset that Google “lured” them into sharing confidential information, which Google then went on to use to develop their own software.