Today's Washington Post has long, detailed and IMHO very good front page article on the rise and fall of the CDO market from its orgins to today:
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/15/AR2008121503561.html?hpid=topnews
as well as a nice graphic on how to create a CDO^2:
http://www.washingtonpost.com/wp-srv/business/interactives/frenzy
which, as it shows, are more important than they sound, because if they hadn't been able to create and off-load CDO^2's, they would have had to stop creating CDOs, since nobody was buying the lower tranches.
I think the narrative of how the bidding war became a frenzy built is really quite good.
Michael