Everyone thought that Cavic won that 7th race, but SI came out with some pictures that finally convinced us that Phelps won.
Interestingly, Phelps' head was definitely in front of Cavic's:
(picture snagged from SI website linked above)
So although Cavic's arms were out in front, his body wasn't, so I don't think he deserved the win either way.
Hopefully now that I've typed Cavic's name 5 times, I'll remember it at the 2012 Olympics. =)