This is really quite interesting; in retrospect, Adorno seems to have the better of the debate, though Marcuse responds effectively on many points.  Alas, both suffered from taking the nonsense of Hegelian dialectics seriously, but there is still much worthwhile in the exchange notwithstanding that.  Marcuse is upset that Horkheimer allegedly described his version of critical theory as "crude and simplified," which it was, but it wasn't, as far as I can see, inaccurate to the core ideas–indeed, as I often say to students, Marcuse often says clearly what Adorno says opaquely.

UPDATE:  Robert Paul Wolff sides with Marcuse, and makes some apt comments.