I don't have a whole lot to say about the Letterman vs. Bill O'Reilly thing, except for a couple of notes:
1. Lots of conservatives are seizing on to Letterman's admission that he doesn't watch O'Reilly's TV show as if that indicates something. Well, I don't watch O'Reilly's TV show either. Doesn't keep me from finding other ways to discover how full of shit he is.
2. Letterman also said several times in the exchange that he wasn't interested in a point-by-point debate with O'Reilly, which conservative commentators are taking as a de facto admission of ignorance. Well, Letterman was clearly making a moral argument against O'Reilly's antics (specifically, his attacks on Cindy Sheehan); and anyway, conservatives who are crowing about how Letterman was apparently unsuited to debating facts don't really gain any ground when one "fact" that O'Reilly cited in his Letterman appearance was actually false.
3. Tarring Letterman with the "rapid liberal" brush is laughable. The man almost never engages in political comment on his show, unless one extends the definition of "political comment" to making fun of George W. Bush. Sure, Letterman does that a lot, but he also made fun of Bill Clinton a lot. (Still does, in fact.)