I was unable to hear the audio of the oral argument, but I received the following report from a source involved in the litigation (I am happy to post reports from others that attended as well—just send them along):

Close call. Justice Blease seemed most bothered by petitioners’ arguments, particularly that the differences in text were not substantial. The Justice went through the various Elections Code provisions that petitioners failed to comply with and had petitioner’s counsel concede his clients had not complied. On petitioner’s rebuttal Justice Blease expressed the view, reading fromCTA v. Collins, that substantial compliance would not save a petition that was carelessly or negligently prepared. He expressed the view that the petitioners were negligent.
Justice Scotland was very concerned about the recent Supreme Court decision reversing his opinion that Prop 80 violated the state constitution and therefore should not be placed on the ballot. He asked each counsel their views on the case and its application to Prop 77. He was particularly tough on the AG regarding this, suggesting several times that the court could sort this out after the election. Justice Scotland also took on the AG with respect to his position that substantial compliance never applies in situations such as those presented by Prop 77. He used the example of a one word difference between the official version and the circulated version. The AG took a very hard line on this.
Justice Butz asked only three questions, two of which were directed to the Secretary of State’s counsel who spoke for only five minutes. She was difficult to read from her questions of counsel.
The court indicated it would rule on Tuesday morning and was aware of the urgency of the matter.

UPDATE Dan Weintraub has this report on oral argument.