Here are some sources I found:
1989 court case
The main legal case is the Apple Computer, Inc. v. Microsoft Corp. 1989, where the change from tiling window management to overlapping was an important aspect. However, this is after the change had already been done, so it may not have been significant in the original decision to use a tiling manager. The court case may have distorted later reporting about the Windows 1 vs. 2 design decisions.
Info World 1983
The Info World magazine November 21, 1983 contains a statement by "Steve Bulmer" [sic] :
But Microsoft has chosen a "tiling" approach to windowing. In a tiling approach, the screen display is divided into columns, and the columns are broken into windows. Windows has a built-in "automatic window layout" feature that resizes all the windows when the size of any one window is altered, so that the windows never overlap. When one window is placed on top of another window, the covered window is instantly transformed into a pictorial representation or icon, and displayed at the base of the screen. "It's the metaphor of the neat desktop," said Steve Bulmer, Microsoft vice-president for marketing. He said that after an extended internal debate about the philosophy of designing window managers, Microsoft had settled on a user interface that will handle many window-sizing functions automatically. Bulmer claimed that the tiled approach to windowing is a more intuitive and predictable user interface. He says that a user can change window size or position with a single mouse click.
Info World 1987
The Info World magazine April 6, 1987 reports that the change to overlapping windows would be a result of the OS/2 collaboration with IBM:
Windows 2.0 to Resemble OS/2 Windows Manager Microsoft has launched an effort to transform the appearance of the control software. The firm announced last week it would make available a new version of Windows, called Version 2.0, in the third quarter that would have a new visual appearance identical to the OS/2 Windows Presentation Manager. The new appearance is the result of a development agreement between Microsoft and IBM, and the main difference is that windows now overlap instead of "tile." Windows 2.0 offers the same external appearance as the Windows Presentation Manager, but it's compatible with the existing applications and device drivers written for the current Windows.
Technical capability
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