[ccvannorman]

I would just think of it as an implementation snag in the hiring process, and don't take it personally at all -- the company is just trying to do their best to get the best candidate, and maybe the one they tried to hire over you simply looks better on paper or some other minor reason. The fact that they came back to you means you were a close second and they know they'd be happy with either of you.

Use it as leverage / bargaining / option just like you would any other offer that is in hand or coming, and as far as your decision / communication you can proceed as if the rejection never happened.

Detail: I am currently interviewing and considering offers, and was rejected by one company in a similar manner -- if they did what your company did, I would follow the advice I gave :-]