Oh, that New York Observer. They're always, like, observing things. Like this Judith Miller debacle, where the weekly is struggling to keep pace with, say, hourly publications like ourself.

But Gaby Sherman is definitely on top of the "Judy rode Scooter" gossip like, well, Judy on Scooter Libby. Media chattering classes say she boinked Dick Cheney's chief of staff while Judy sounds like Jessica Simpson's publicist: deny, deny, deny. And she's using it as her basis to trap the New York Times into her severance negotiations.

Ms. Miller and her lawyers signaled that they were specifically displeased with—and might consider legal action about—Mr. Keller’s use of the word “entanglement” in his memo to describe Ms. Miller’s connections with now-indicted Vice Presidential aide I. Lewis (Scooter) Libby. In the light of long-circulating gossip about Ms. Miller’s romantic life, that word choice led to widespread speculation and mockery. In a follow-up phone conversation, Ms. Miller described the insinuation as “completely untrue.”

“Many people—many other journalists—assumed that there was an improper relationship,” Ms. Miller said in Sag Harbor. “Many people assumed there was a sexual relationship, which is one reason I’m so insistent on that, on his clarifying [the word choice]. I’ll be diplomatic, O.K.? I call it a correction. And at The New York Times, we call it a correction …. But I’ll settle for a, quote, ‘clarification.’”

And we'll settle for a, quote, "immediate end to all Judy coverage," but we don't always get what we want. And what fun is speculating about someone's sex life when the truth isn't as scandalous as the gossip?

Miller At Gates, Negotiating Exit With Sulzberger [NYO]