Fox originally owned the rights to making it into a movie, but they never did. Somehow, Warner Bros. thought they could make the movie without drawing a lawsuit from Fox because the movie had been pitched to several studios. Fox sued saying they still owned distribution rights, if not also production rights. It was unclear whether the movie would get delayed, purchased by Fox, or just completely axed. Fortunately, they've come to an agreement which has Warner handing over some chunk of cash right now, and then splitting some of the movie revenue with Fox.
See Watchmen trailers in HD on Apple's trailers site, or view the one I've embedded below: