There is an article in Folha.com.br, one of the most respected Brazilian newspapers, talking to the Airforce's accident investigation and prevention team about the accident. The final report, which may be coming out in August instead of September, will talk about the following sequence of human errors, from the pilots and ATC, that led to the last September 29th accident.
The Legacy Pilots involuntarily turned their transponder off. The AF cites that radio commands were entered into the transponder, and that the radio and transponder controls look alike and are in the same panel box (right next to each other), which also rendered comms difficult or impossible. That would explain why over 20 communication attempts failed.
There was a visual warning that TCAS was inoperable - "TCAS off" - (TCAS requires a functioning transponder to work) in front of the Legacy's co-Pilot, but who did not notice this.
According to the CVR, after the collision, one of the pilots (article doesn't mention which) sounds alarmed and asks the other whether TCAS was turned on. The other admits, "Yeah. It's turned off". Couple of minutes later, the system is back running normally.
ps: They did not talk about ATC in the article, but they mentioned they were at fault too. Not warning the 737 is probably one.
[Edited 2007-07-03 17:34:33]