I have a fairly interesting perspective; I was there when Steve first returned, left after a few months and then returned in less than eighteen months.
I initially joined as a refugee from Be, as it became obvious the PowerPC would no longer be a viable platform for BeOS. I joing the Final Cut Pro team, which has just joined Apple as part of an aquisition of the "Key Grip" video editor from Macromedia.
The FCP team located in IL1 on the third floor I believe. Most of the floor was occupied by the Apple Advance Technology Group. ATG had a really cool space with private offices ringing the outside walls and interior areas with lots of whiteboards and space for doing whatever ATG did. Larry Tesler had a double wide private office and there was a lot of commotion.
The "Blue" team working in MacOs 9 was below us. It was very busy down there as OS 9 was the engine that still powered the company. Those first cool iMacs and MacBooks weren't running OSX! I don't think we even had a "Beaker" build yet.
Steve simply didn't like ATG and over the next few months the spaces rapidly cleared out. We were once stuck in a corner and soon we had a lot of room to set up a couple of large commercial quality edit suite with Avid Media Composers and other high end gear to help make FCP a commercial success.
I wasn't part of any sort of political competition; we just kept making FCP, but watching the exodus of ATG people and seeing how stressed out Steve Glass was running the Blue team was getting me down.
The NeXT people were setting up their world in IL2, with Avie taking an office on the 4th floor and an unofficial sort of NeXT hardware museum springing up outside of the area where the pool table was. It was a cool place to visit; lots of neat NeXT hardware and some SparcStations as well. A Symbolics workstation also showed up in a conference room on the second floor, although it may have been at Apple earlier. If you looked in various hardware labs, there was always intersting hardware to be found; DEC, Infographics, VAX and more.
It wasn't at all obvious to me that Apple was going to figure things out; Steve was being disruptive (in a good way?), but Gil, Ellen, Steve Glass and others were still around and all the NeXT people were doing their thing. I was convinced by some former Be people to go join Andy Herzfeld, Susan Kare, Mike Boich and some other Apple engineering heroes of mine (Darin Adler, John Sullivan) at Eazel.
Eazel folded within eighteen months and I was back at Apple as part of a group hire Andy helped setup with Steve. Anyone who wanted to work at Apple just showed up the next Monday and got to work! Many of those who didn't come to Apple ended up going to Danger Research, Google and other startups. A lot eventually ended up at Apple anyway.
The Apple I came back to was different in that Steve was officialy CEO, but the divisions between groups were still there. It would take several more years before I felt that things felt healthy. As soon as I did think things felt good, Steve become ill, Scott Forstall erected a secure fortress on my floor on IL2 and the political shenanigans began. My initial stock grant priced at $14 a share had grown, gone through a couple of splits and the company was doing billions of dollars a quarter. A far cry from the bleak days of 1997!