This report focuses on one technology initiative, the Technology Literacy Challenge Fund (TLCF), and on five states as they attempted to implement the program in the first year of funding, 1997-98. The five states selected--Illinois, Massachusetts, Mississippi, Texas, and Washington--varied in their location, size, minority population, poverty levels, and approaches to infusing technology into K-12 education. (Findings do not necessarily generalize to other states.) The report presents key observations about three broad research questions: "What were the experiences of States and districts in implementing the Technology Literacy Challenge Fund?""How were States and districts using the Technology Literacy Challenge Fund?" and "How did Technology Literacy Challenge Fund activities relate to other technology and reform efforts?" The report highlights a number of issues that could influence the impact of the program in the future. In addition, the five case studies provided an opportunity to identify the conditions that seem likely to influence the eventual success or failure of the TLCF program. (Contains 15 references.) (AEF)