NEW YORK — She pulled the plug on her TV show and her magazine is now only back issues, but on Thursday Rosie O'Donnell was in the spotlight again, delivering one-liners and heartfelt soliloquies in her battle against the German magazine publisher suing her for $100 million.

"I'm a woman who likes challenges, who stands up for what she believes in, like speaking out in this lawsuit," said O'Donnell, explaining why she wanted Rosie Magazine to tackle more controversial subjects.

O'Donnell's desire for edgier content was rebuffed by Gruner + Jahr executives, who filed a $100 million suit against her last year, claiming she sought to sink the magazine when she couldn't get her way.

O'Donnell upped the ante, countersuing her former backer for $125 million.  She says the German giant disparaged her in the press, massaged its financials to prevent her from exercising an out clause in the contract, and usurped the editorial control the agreement ensured.

The boisterous O'Donnell has been anything but quiet during her trial in Manhattan Supreme Court, which kicked off last Thursday. But Friday was her first chance to speak on the record in this bitter breach-of-contract dispute, testifying as the first witness in her case.

O'Donnell was riding a wave of critical and commercial success from her daytime talk show when she began talking with Gruner + Jahr about converting the failing McCall's magazine into a women's magazine with attitude.

O'Donnell had a full schedule and was reluctant to start another project. But Gruner + Jahr CEO Dan Brewster wouldn't take "no for an answer," she testified, supporting her desire to pursue controversial social causes and promising her editorial control if she'd sign on.

"He convinced me," said O'Donnell. "He told me he would control the business end and I would control the creative."

Brewster, however, had one question.

"He said, am I going to be a controlling uber-bitch like Martha and Oprah?" O'Donnell recalled.

"I said [celebrity-fronted magazine pioneers] Martha and Oprah are pretty successful controlling bitches, don't you think?" O'Donnell shot back.

And, in fact, Rosie Magazine was an initial success, gaining new subscribers and critical acclaim for its conscience. The magazine debuted in March 2001, and the first few issues, said O'Donnell, really "pinged." She compared the feeling to seeing her baby speak for the first time, or hearing an orchestra tuning up before a show.

But the bad blood began soon after O'Donnell ended her talk show in May 2002.  Magazine executives then began to react to the publication's flagging circulation, claims O'Donnell. They pushed the magazine in a safe direction despite her yen for controversy.

Gruner + Jahr CEO Dan Brewster denied earlier Wednesday that his company had cooked the books to prevent O'Donnell from exercising an exit clause in her contract.

O'Donnell's lawyer, Matthew Fishbein, challenged Brewster over a series of memos and e-mails in May 2002 in which Gruner + Jahr officials asked German higher-ups for permission to "manage the financials" to stave off a projected financial loss that would have allowed either party to walk away.

A May 2, 2002, memo from Gruner + Jahr CFO Larry Diamond to Axel Ganz, head of the company's international division, said in bold-faced print, for example:

"The management team of G + J USA is recommending to you that we manage the financials such that we do not fall below the required threshold point, so that we can continue to publish Rosie. We are asking for your approval to this strategy."

Other e-mails showed Ganz approving the strategy via phone. Although Brewster didn't deny having been involved in the discussion, he insisted, "There was no management of any financials."

O'Donnell, her hair carefully coiffed, came dressed conservatively to court in a navy blue blazer over a red shirt. She seemed to rely on humor to calm her nerves during almost an hour on the stand.

After responding to her lawyer's question about whether she'd done successful product tie-ins in the past, O'Donnell launched into a rambling description of a product she had developed with Fisher-Price, a plush doll that said things like, "Everybody's a star" and "You're a Cutie Patootie" when its stomach was pressed.

"Just answer the question as briefly as possible," admonished state Supreme Court Justice Ira Gammerman.

"Yes. Fisher-Price. A doll," O'Donnell quipped in staccato, unleashing laughter from the packed courtroom.

Not all the testimony Wednesday was so light. Company executive vice president Dan Rubin and a magazine expert detailed the financial formulas they used to determine the company's losses after O'Donnell's alleged abandonment.

Rubin said the losses ranged from $27 million (Gruner + Jahr's initial $15 million in assets plus about $12 million in cash they spent since the magazine's launch) to $35 million, a figure that relied on an expert's calculation of how much the company was actually worth when the troubles started brewing.

Kenneth Collins, the magazine expert, was the last witness for Gruner + Jahr lawyers. He told the court that he valued the magazine in July 2002 at between $59 million and $63 million.

But on cross-examination, Collins admitted that he had no idea where the financial projections he plugged into his formula had come from, and Gammerman appeared to dismiss his testimony as lacking foundation.

O'Donnell will resume the stand Friday morning at 9:30 a.m.