The LA Times reports that eligible Prius owners will not only get money reimbursed to fix the lights, the headlight warranty will also be extended to five years/50,000 miles, up from three years/36,000 miles. Up to 320,000 Prius owners with HID lights could be affected. Starting in February, eligible owners will be notified by mail and they will have 90 days to register.
Even though this is probably an expensive settlement, by agreeing to it, Toyota does not need to go in front of a jury, risk a recall, and does not have to admit to any wrongdoing. The LA Times learned that about half of the complaints regarding the 2006-2009 Prius in the NHTSA database were about "lighting, headlamps or visibility." Prius Chat has a detailed page on the issue, and recommends that even drivers who replaced an HID bulb after 5 years or 50,000 miles should submit a claim for reimbursement.
[Source: LA Times, Prius Chat]