Trouble the Water, a gritty documentary about the aftermath of Hurricane Katrina, was amazing enough to win the grand jury prize at the Sundance Film Festival, but, oddly enough, isn’t amazing enough to get picked up for distribution. Why? The rumor is that the film is just “too black.”

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Wake up, biz dev-ers! Have we got some deals for you. The CBS-NBC partnership that created Sundance is now ready to unload the Robert Redford-backed company, with a Wall Street analyst declaring the channel has been on the block for several weeks. Cash value? Something like $400 million, which could attract the likes of Time Warner, Viacom and Cablevision. Meanwhile, NBC is throwing two of its owned-and-operated stations into the sale ring: Hartford's WVIT and Miami WTVJ. Jeff Zucker is looking to unload the two, which would make six O&O sales in the past two years.

SUNDANCING Need to find your way around Park City this time of year? Use a map! Morons. [Jaunted]

It's our week-long duty to bring you a taste of Sundance, which is sort of like Taste of New York, except with more free swag and movies nobody is seeing.

And speaking of movies – you know, the reason Sundance exists – we're told by one Sundance insider that "none of the celebs are here promoting their movies. Last year they all attended their screenings (at least premiere screenings) and this year there is almost nobody on the A-list that is attending those."

Change, as the kids say, is in the wind. Add to the fact that, as one source tells it, "the celeb scene is not so great this year," and it's a recipe for gossip disaster. Like the disaster of Diddy's performance at the MySpace party on Saturday night.

Meanwhile, we hear that there really is no reason to abandon NYC for Park City, since as of Sunday night:

Marquee was packed with the usual Monday night Butter scene (Scott Sartiano, Dhani Jones, top celeb publicists Greg Link of Fingerprint and Matt Hein of Eastside PR) while Tao was an overcrowded party with a rough crowd. Diddy was upstairs in VIP with an oversized posse, and the smell of pot the kept floating down to the main area seemed to be coming from their corner pretty consistently. Matisyahu (rappin' reggae rabbi) got on stage for an impromptu performance and did two songs. Perez Hilton was roaming around (soooo hard to miss with that obnoxious pink hair) and was attached at the hip to Mike Satsky, the owner of stereo. CT from the real world was wearing the one outfit that he always wears on TV and looked greasier than ever.

And … then?

The after party that everyone talked about was the Heineken Light karaoke party, and people left at 4 even though it didn't end til 5 (that's a bad sign since usually everyone milks the parties until they are done).

Elsewhere, our spies file:

• DJ AM, spotted everywhere with Mandy Moore, is actually here on business: he's spinning.

• Sienna Miller did an interview session at the Delta Sky Lodge, and Diddy proceeded to show up and persuade his way inside "because he wanted to see her."

• The PM house hosted an after hours party in Deer Valley "that was so high maintenance. Super exclusive and you had to take a shuttle to get there." Guests included Diddy, Jamie Lynn Spears, Damon Dash, Pharrell, Harvey Weinstein, Nick Cannon, Sienna Miller, Josh Hartnett.

• Among the most amusing movies that are screening: Farce of the Penguins, as March of the Penguins mock that was prescreened at the house of Fingerprint PR chief Greg Link. (Makes sense, since he had a few lines in the flick.)

While we waste away the week from the confines of our cold, barely insulated headquarters, we've made sure to place spies on the ground at Sundance, who are filing away from the cold, completely-lacking-insulation confines of Park City, Utah. From a smorgasbord of tips, we've compiled the following Sundance cheat sheet:

• Population: 80 percent dudes, 15 percent cougars, 5 percent other.

• At the Gen Art and Delta Sky Lodge Opening Party on Friday night, guests were virtually unwelcome — even those who paid extra for their VIP passes. Dustin "Screech" Diamond, however, was allowed entry (to watch his friend cripwalk on the dance floor), though his presence was likely due to the fact that there were no "real" celebrities in town yet.

• Also Friday night, a Diddy sighting! A spy spotted the rap mogul and his "entourage of 'goons' arriving at the token late night drunk food destination … His phone was glued to his face and he didn't seem to care about the woman by his side, who did not seem to resemble his girlfriend by any means."

• So far, the nightly MySpace parties at Tao "have actually been a bust." One source says a "bunch of my friends had tables there and everything, and they still left after 30 minutes because it was horrible."

• First day feel, summarized by a single overheard quoted uttered on Main Street: "Is that Gary Coleman?! In the cowboy hat? Why are they following him around?"

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Files a tattler braving the Sundance orgy:

Walking up and down main street right now are a slew of young women with messenger bags….inside the bags, free copies of NY Post.

They are wrapped in white paper saying compliments of "One Rat Short," a short film in competition.

The New York Post .. wrapped in rat paper. Somethings are just so fitting.

• Arianna Huffington is adding original political reporting to her online outpost. Even better: Staffers will be paid!

• It comes as a shock that it's Reader's Digest who requires you to be hot to lead the company.

• Sundance readies 122 feature films for this year's festival. Attendees will stick to just one digital short and 16 parties.

• CBS let 3 Lbs get all the way to the 3-episode mark before canceling it.

• With Charlie Gibson, Brian Williams, and Katie Couric all currently reporting from Jordan, it looks like the news lass is landing the biggest gets.

• Former AIG chairman Maurice "Hank" Greenberg showed what it takes to move the NYT's stock upward: false rumors of a takeover bid.

• Fox News has at least one staunch defender — who sometimes makes sense.

• It's no guest editing French Vogue, but if you win Stuff's contest to be an editor for a day, promise to email us?

• Google engaged in secret advertising practices? Psshaw!

• At first we were like, "an exhibit on fairies? Yay!" Then we realized by "fairies" they actually meant little pixies with wings. Go anyways, though — it's Japanese and cool looking and there's free Newcastle. (5/19) [Free NYC]

• Please go to the screening of Artstar and spread the word of how much it will suck. That'll teach them from making any more contest-based reality shows. (5/12- 6/1) [TONY]

• Hey everyone remember Blink 182? Vaguely? Well one of them has a new band now, and you can be their very fist groupie. (5/16) [Oh My Rockness]

• Oh, and those west coast bitches thought they were so cool for getting Sundance. Ha, now Brooklyn has movies, too, suckas. (5/12-5/21) [Flavorpill]

All the bru-ha-ha over The Sundance Festival is starting to weigh heavily on Robert Redford's shoulders. What was originally intended to be a showcase for low-budget films by talented, young filmmakers has turned into a paparazzi circus of swag.

"Once the merchants come, then the celebrities come. Once they come, the paparazzi come. Once they come, fashion comes. So suddenly you've got a party … where Paris Hilton's there and all the attention goes there and she's got nothing to do with anything."

Well, to be fair, Paris Hilton does have a little bit to do with low-budget films. But as far as having a purpose to exist, well, we think Redford is pretty right on about that.

Redford Says Sundance Taken by a 'Fever' [Jake Coyle, AP News]

If the incessant coverage of Sundance – and, more specifically, incessant coverage of blog coverage of Sundance .. thanks Reuters! – hasn't caused you to yack with such force that even Lindsay Lohan would have to own up to it, perhaps Yahoo's shameless (and shameful) attempts at reminding you how hip, urban, and celeb-friendly its brand is will manage such a feat.

Over the weekend, Yahoo's PR camp blitzed off a release about its Yahoo! Cafe, a makeshift tented enclave in the Park City snow where the B-list and well-connected grips come to sip hot cocoa and pick up free swag. Actually, we're not sure if it's "Yahoo! Cafe" or "Cafe Yahoo!" — the press release doesn't match up with other coverage or the photos.

Shannon Elizabeth was seen enjoying the french toast while Lance Bass tried the scrambled eggs. It seems that David Krumholtz is a mac and cheese man and Joe Pantoliano likes a side order of sausage with his oatmeal. When they're not eating, many stars are taking the time to talk with Yahoo! about their Sundance experiences.

Okay, fine, they've got their big breasted and flamboyant clientele covered, but where are the celebs that have earned more than $2 million last year? From the Yahoo tip sheet, the following "celebrities" have been spotted:

Robert Downey Jr.
James Van Der Beek
Good Charlotte
Scott Caan
Giancarlo Esposito
Marlee Matlin
Tommy Lee
DB Sweeney
Sam Jaeger
Justin Long
Ben Foster
Robin Tunney
Melonie Diaz
Gregory Smith
Marvin Scott Jarrett
Donovan Leitch
Jack Osbourne
Astra Heights
Jordan Eubanks
Chris Masterson
Richard Titus
Cady Huffman
Ellen Muth
Vivian Wu
Amanda Demme
Beth Stolarczyk
Jason Wahler

Uh, yeah — after Robert Downey Jr., James Van Der Beek, and Good Charlotte, we didn't really know any of the other names either. Perhaps the Internet giant should stick to what they know best: sending bloggers to war zones.

Sundance Film Festival Coverage [Yahoo!]