Sippo, I believe they're just referring to the actual case the gun is in. I don't believe for a moment that they'd force you to have hard sided luggage all in all. I *think* I've flown on Continental with no issues. However, I have a friend who flies continental all the time and has never had an issue.
However, hard sided luggage, if you can afford it, is a good thing to have anyway. Certainly don't be discouraged from buying it if you have the opportunity.
ôSay what you will about the sweet miracle of unquestioning faith, but I consider the capacity for it terrifying...--Kurt Vonnegut