I have gotten dizzy trying to keep a grip on the various uses and meaning of the word "covert" in the Plame case. Like you, I'm not an expert. But I don't think you have to accept the maximal claims of either side to see what happened.
The bottom line is that there was some doubt about how covert she was - even within the Bush administration. They knew they were very close to the line, if not over it. Hence the bizarre and convoluted downlow media strategy in leaking the information.
All that matters to me is their motive.
Oh, it's not that hard. If you know that someone works at the CIA, you err on the side of caution, until your are certain. Period. This point came up in the hearing.
In other words, there is no such thing as a "desk-jockey" defense. In fact, V. Plame was not a no-name grunt, she was one of the CIA's highest/riskiest of no-name agents, carrying a non-official-cover status. Her classmate from the CIA explains. Basically, these folks are involved in things so sensitive that they are denied to be part of the government, lest it be implicated.
Because you can be prosecuted mightily if you knowingly out an operative, one understands the origin of the "manfactured confusion" about her status. They have to say that or it's close to treason for them.
On motives, I have a just as likely, but somewhat less dark overview in this bit, called, The Political Misfortune of I. Lewis "Scotter" Libby.
link: Bootstrapping Andrew Sullivan
