@emergent monkey,
It's definitely a experiment that can be interpreted in many ways, as many people have done, and its easily to misinterpret as well, as im sure many people have also done. Other people recently have furthered Libets experiment with modern scanning techniques. John-Dylan Haynes for example, has measured prearranged decisions in a persons mind up to 10 seconds before they actually choose from those decisons and act. He set up an experiment where a person chooses to click a button with either their left or right hand, and can accurately predict up to 10 seconds before they decide to use a hand, which hand they are going to use.
Now ofcourse, this is a different type of choice. A very simple choice involving motor skills. It's hard to apply this data to other types of choices, but in this case, it does further our concept of free-will being an illusion. If anyone has 90 minutes of spare time, which I know alot of us dont or are not that interested, but here is a video lecture by Haynes where he goes into great detail about unconscious determinants of free decisions:
Unconscious determinants of free decisions in the human brain
The way I interpret Libets experiements though, is the decisions you can freely decide to choose from are created in a different area of the brain, which is what Libet measured through the EEG, and then that set of prearragned decisions are pushed into your awareness, thus giving you a choice, however, a choice from pre-arranged choices, giving you the illusion of free-will. No, it doesn't elminate free-will, it simply shows its illusive aspects. The expirment only furthers our knowledge of how free-will works. Yes, we are still making choices, but free choices from a set of choices we have already decided to choose from, becuase that set of choices comes from a area that is unaware, and is pushed into awareness for further processing. The expirement doesn't elminate the fact that we can also not choose any of the choices we so desireably want to choose from. So, if anything, free will is just like a separate program involved in determining what choice to choose, or not to choose, from our unconscious prearranged choices. That is to say, to supress our desires or not.