Your first paragraph has nothing to do with what I've been arguing here since it obvously refers to the Barco settlement and I've already posted that I agree with your conclusion regarding Barco.

"Why would anyone "SETTLE" their litigation based on the either you win the Markman or we win Markman or else we stay at it in litigation? "

The contingency can be part of an overall settlement where the infringer agrees to pay X amount of dollars now, but will pay even more if we win certain aspects of the Markman. Kind of, "we admit we infringe on the 584, but the 336 is still up in the air. So we'll sign now based on owing you for the 584, but we won't pay on the 336 unless the Markman results come out a certain way. If they're not decidely in your favor, we pay no more." The incentive in this case is to obviously cut legal fees since the infringer has decided it's not looking good and they'll probably lose it taken to trial.

That IS a real world situation as I've seen similar agreements. Not in IP litigation, but similar circumstances.