I'm hoping one of the actual devs will jump in on this one. I've seen some things posted by non official sources regarding retreat that I can't figure how they got that interpretation.
Here is the situation. Player A (Zerg) is invading player B's (terran) area. There are 3 spaces. 2 zerg owned, and the one terran space. When th retreat is played, all of the zerg forces were mobilized from one of their areas into the terran. When the battle is canceled does that cancel the movement? Do they return to their starting places? I assumed the results should be treated exactly as if the defenders had all successfully used cloaking, except have to retreat to an empty space on the active planet as per the card text instead of being able to fall back to an adjacent planet. If they exceed the unit limit of the space they retreat to, the excess die. Attacker continues like any other successful attack, and send any overflow to any acceptable spot.