At a literary event last weekend, James Frey publisher Nan Talese picked at old wounds. Old Oprah wounds.

Talese had apparently come to the Mayborn Literary Nonfiction Writers Conference of the Southwest in Grapevine, Texas, ready to rumble. In an afternoon discussion on Saturday, Talese brought up the issue of Frey's memoir. Saying she was unapologetic about publishing the book, Talese said in her genteel, mid-Atlantic accent that it was Oprah who needed to apologize for her behavior in the affair. Talese argued that Frey, in the gripping manuscript he submitted, had described himself as a liar, a cheater and an addict, and under those circumstances she did not believe she was reading "the New Testament," where every word was avowed truth. She described Oprah as exhibiting "fiercely bad manners."

Oh, it gets better.

CONTINUED »

Random House owes readers 2.35 million little pieces after the James Frey stunt they tried to pull over with Americans. And Oprah. The class action suit filed by readers – over 2005's 3 million-plus selling A Million Little Pieces turning out to be a work of mostly fiction – is ending with a preliminary settlement approved to spread $2.35 million of the publishing giant's balance sheet among defrauded Barnes & Noble shoppers.

If you're a paperback reader looking to recover your $14.95, you need to tear off the cover as proof of purchase. If you're a hardcover reader who wants up to $24.50 back, you need to tear out page 163. Too bad, too, 'cause we hear the lying is just getting good around there.

Finally, some theater for the hip, young literati in New York. This one-man show is sure to be filled with dudes in tight black jeans and girls with black hair and red lipstick … but we don't care. Anything that goes out of its way to delve into James Frey and J.T. LeRoy is golden.

Mike Daisey's Truth, a one-man monologue about "James Frey, J.T. LeRoy, Oprah, lying, and the struggle to tell the truth," is set to open tonight in New York.

According to its official description, Truth "follows the fictional and nonfictional self-destruction of A Million Little Pieces author James Frey, the sordid and shocking tale of non-existent, world famous transsexual author J.T. LeRoy, and the mystery of the wildly prolific multiple personalities of Portuguese poet Fernando Pessoa."

So, it's James Frey, J.T. LeRoy, Oprah, and Fernando Pessoa? We're not judging, but would it really be that hard to throw in Kaavya Vishwanathan or Nick Sylvester?

One-Man Show About James Frey, J.T. Leroy To Open Off-Broadway [Fishbowl, NY]

While it may not make up for the fact that drug addicts everywhere slipped back off the wagon after realizing their inspiration to stay sober, James Frey, was a total fucking liar, Random House is offering a refund to readers who bought A Million Pieces before Frey's public shaming on Jan. 26.

Neither Random House nor Frey actually admit to doing anything "wrong" (drugs aren't wrong) but "a person familiar with the negotiations" told Motoko Rich that the readers who sued Random House and Frey will win the case. (The judge hasn't actually ruled on the case yet, so we're going to take this piece at gossip face value.)

Under the terms of the agreement, which has been accepted by 10 of the 12 plaintiffs who are part of the consolidated case, both Mr. Frey and Random House will pay out no more than a total of $2.35 million, which includes the cost of refunding customers, lawyers’ fees for both sides and a yet-to-be-specified donation to charity.

In addition, readers not involved in the suing of RH can be refunded as well. Random House is making it super easy, too: if you bought the hardcover, send page 163 and you'll get a $23.95 refund; paperback buyers send the front cover for a $14.95 refund; those who can't read and bought the audio version, send in "a piece of the packaging" for your $34.95 back. And finally, if you know what an ebook is and bought one, send in "some proof of purchase" for your $9.95.

And while we think they should, your receipts for the additional 8 weeks spent in rehab due to realizing the "inner strength" method actually didn't work, do not count as proof of purchase.

James Frey and His Publisher Settle Suit Over Lies [Motoko Rich, New York Times]

• The Haley Joel Osment headline we can't believe we didn't think of: "I see handcuffs." [AP]

• BlackBook welcomes James Frey with open arms. (We're also not convinced that BB fact-checks more than the NYT does.) [WWD]

• Is Suri is a runt baby? Is that what's wrong with her? We'll find out once VF runs their 21 hours of photography. [MollyGood]

• Roger Ebert writes a letter about his spit cancer. It's more information than you would ever want to know. [Roger Ebert]

• If the people making the cigarettes tell you not to smoke, will you listen? Probbly not. But we bet calling them "high cal" instead of "light" would do the trick. [Media Week]

• Finally, the World Trade Center victims will have some compensation for hacking up their lungs. And who doesn't want a little extra cig cash? [NY1]

• Some people think New York is a melting pot. Other times, it seems a little more like a salad bar. [MetroNY]

• A family barbeque, rescuing a drowning man, grilling some more burgers … just a typical day off for the NYPD. [NYDN]

• This shit is the yogurt y – o – g – u – r – t … seriously. [NY Sun]

• Sick of getting your sweater snagged on the L.I.R.R. arm rests? Well, if you insist on going to Long Island, your life just got less complicated. [NYT]

• James Frey is sort of getting by with a little help from his semi-connected friends. [NYM]

Big shocker here, folks. James Frey didn't decide to stop being a liar when he wrote his second book, My Friend Leonard. After admitting that he fabricated details of his first "memoir" A Million Little Pieces, he now comes forward with this confession.

In "A Million Little Pieces," Frey writes of a three-month jail term that he later acknowledged never serving. "My Friend Leonard" begins with the author behind bars, getting hit in the head by a "three hundred pound man named Porterhouse."

"I did not spend ninety days in jail, and Porterhouse is a fictional character," he writes. "Many of the other characters' names and identifying characteristics have been altered or fictionalized, as have major events in their lives."

What the fuck? That was one of the only parts we really believed happened.

Frey Acknowledges Fabrications in Sequel [Hillel Italie, AP News]

We're really not sure we can handle another memoir. After James Frey and JT LeRoy rocked our autobiographical boats, we swore we would never believe anything anyone told us again. Ok, that's a little extreme, but we decided that memoirs in general were merely outlets for the evils of publishing.

And then Kaavya Viswanathan came along and proved that not even chic lit was safe from the biggest faux paux in publishing. And now we have publishers throwing millions at Valerie Plame for her memoir. When will these book nerds ever learn?

"At least four publishers are vying for the memoir of outed CIA agent Valerie Plame - and the bidding has reached seven figures, publishing sources told Media Ink.

Plame, of course, is the career agent who was working undercover - until her name was leaked to reporters, triggering a full-blown scandal in Washington, D.C., in the hunt for the leaker.

Then again, this whole story is already based around lies and sneaky secrets, so maybe Plame can somehow resist the need to inject even more scandal into this story. And we also sort of feel like maybe the players in this particular story have already used up all the lies the world has left.

PLAME GAME WINS 4 BIDS [Keith Kelly, New York Post]

The James Frey hotline is now taking calls.

After discussing whether or not to print a revised, non-plagiarized edition of Kaavya Viswanathan's How Opal Mehta Got Kissed, Got Wild, and Got a Life, Little, Brown has decided "not gonna' happen."

They have also decided not to publish her planned second book … and we're assuming the movie deal's been killed as well.

The decision caps a stunning downfall for Viswanathan, 19, a Harvard sophomore whose novel came out in March to widespread attention. Viswanathan, who was 17 when she signed the deal, did not immediately return calls seeking comment Tuesday.

We guess that after taking out all the borrowed material, the book didn't have any words left in it … which would make it a better read than Opal, but still a pretty tough sell at Borders.

Young Harvard Author's Book Deal Canceled [Hillel Italie, AP News]

• James Frey donates his own books, not money, for a good cause. [P6]

• As Perez Hilton explains it, the Lindsay Lohan v. Jessica Simpson spat began as any catfight does: hairdressers and stylists. [Perez Hilton]

• It was always coming to this: Michael Jackson will unload part of his Beatles catalog to Sony to avoid bankruptcy. Well, at least at some point in the future. [NYT]

• Paula Abdul got tossed out of L.A.'s Xenii not because of a fight, but because her ass was druuunk. [P6]

• CBS prez Bob Schieffer and Katie Couric take their love affair to Michael's, complete with wrist corsage. [Lowdown]

• Congrats to Maggie Gyllenhaal and Peter Sarsgaard on their shotgun engagement. [Star]

• Meanwhile, Chad Michael Murray's new fiance isn't pregnant, and they're getting married anyhow. [People]

• West Wing creator Andrew Sorkin snags a starring role in a call girl's tell-all. [P6]

Bookworm nerds sometimes use the internet to scour Amazon listings. And today, Galleycat, of the Mediabistro book nerd clan, discovers this interesting little factoid. James Frey's next book, My Friend Leonard, is not being classified as a memoir.

Because half of his first book, A Million Little Pieces was made up of lies, and Leonard isn't far behind, Penguin figured that "fiction" was a better category for the book, set to be released in May.

The kicker most definitely is the "Amazon Questionnaire" which includes a revealing Q+A.

Q: What is the worst lie you've ever told?
A: No way I can answer that.

Nobody's really sure when this questionnaire was filled out, but we have a feeling he could probably answer that one now.

My Friend Leonard Officially a Novel? [Ron Hogan, Galleycat]

If a publisher were paying a writer $900,000 to publish a book based on a 79-page proposal, one would assume that the proposal would reflect the outcome of the final book.

Unless that person is Emily Davies, the proposed author of How to Wear Black: Adventures on Fashion’s Front Line, who assumed that a compilation of stuff a bunch of other people wrote would suffice. (Seriously, do publishers even have people who's purpose it is to make sure book proposals aren't chock full o' lies?)

Oh, the trials and tribulations of the "memoir" category. It does get oh so tricky. So tricky, in fact that instead of writing her proposal on her own experiences as a fashion reporter for the London Times, journalist turned James Frey wannabe thought that lifting the experiences of Monique P. Yazigi, who penned the 1998 New York Times piece, “The Glamour Girl’s Guide to Life," was no big deal.

Davies claimed, in effect, that it was easier for her to give prospective publishers the flavor of her memoir by appropriating other writers’ words than by relying on her own memories.

Chapter 12, which is based on meeting Alexandra Kotur, is based entirely on another writer's memories — a writer who happens to currently be shopping her own book, based on those memories and experiences.

Granted, the sign of a great writer may very well be his or her ability to take on and explore lives that are far removed from their own. This is what we call "fiction." Example: Memoirs of Geisha. Written by a white guy. Fiction.

Come on, if you're going to pass off someone else's life as your own, at least pick one which can't be found through a simple Nexis search. It's like a beat reporter from Newsday going "hey, I just got a $2 million advance to write a memoir based on my life as a war reporter. Yeah, well, the proposal took a lot of stuff from Jayson Blair's columns, but I'm not going to use them in the actual book."

Borrowed Memories [Jeff Bercovici, WWD]

**Ed Note: Thank you to Rachel Sklar for pointing out our disappointing comprehension of Barbara Streisand lyrics. Our gay/Jewish other half is currently on the other side of the world.

• And don't forget to tune in tomorrow to Today, when Ann Curry gets her hair cut. Thrilling, people. [NBCUMV]

• Is it just us, or does Brad Pitt act like Angelina Jolie's sad, lost puppy more and more every day? [Page Six]

• James Frey totally ruined writing books for everybody. [NYDN]

• Hilary Swank is the new "face of fragrance" for Gurlain. We initially wondered if the fragrance was being marketed to men (it happens to be for women), but then we were faced with an even greater enigma. Why oh why would anyone ever want her face on anything? (Please don't beat us up Hil.) [People]

• Oh, Lindsay Lohan. Despite her spunky attitude, tattoos and eating disorders, we usually think she's a pretty classy gal. But hooking up with your ex at the SoHo Grand? That is so Paris Hilton. [Page Six]

Welcome to the post-Frey backlash of reading lists.

Unlikely dog tale tops U.S. best-seller list [Reuters via Drudge Report]

Despite the fact that he is, by now, a well-known fiction writer, James Frey's seven-figure contract with his current publisher, Penguin-owned imprint Riverhead, has been nixed.

Originally, Frey was set to pen two more works, including his first admitted novel, a "multi-voiced, multi-threaded story of contemporary Los Angeles." The novel was slated for publication in fall 2007, according the the New York Post.

Even though Frey has a real knack for fiction writing (A Million Little Pieces just hit the 3 million mark) nobody's going to touch this guy with a 10 foot bong. Even Warner Brothers is reconsidering the movie deal with Frey, based on his fake memoir. Which is somewhat disappointing — were so looking forward to the crackhead boy meets troubled junkie in rehab story.

Especially because it would have given Jared Leto and Lindsay Lohan the chance to make another movie together.

PUBLISHER AXES FREY DEAL [Page Six]

An article in the New York Times today highlights the growth of celeb weeklies. The story that's been done a hundred times always looks new and important if NYT does it, though, right?

We learn lots of un-fun facts such as, young people are obsessed with celebs, and if each mag doesn't find its own niche, doom will surely fall on the tabloids. And then this precious point of info came along.

The only magazine that seems to actually be suffering is O, The Oprah Magazine. With a circulation drop of 9.3 percent, the Hearst home mag has hit a sinking slump.

One of the surprises in the figures released yesterday was a circulation drop of 9.3 percent for O: The Oprah Magazine, published by Hearst. The magazine said it raised its subscription price so that fewer people would subscribe; a higher circulation generally means a higher rate to advertisers, driving some away.

(The drop was unrelated to Ms. Winfrey's confrontation on her television show in January with the author James Frey.)

So not only have we found something that we can't blame on James Frey, but our suspicions have been confirmed: nobody wants to read Oprah's mag because, plainly and simply, it is so dreadfully boring.

Like anyone really cares about her favorite things to give her friends on Mardi Gras. At least James Frey's story had fun tips, like how to stare down a glass of bourbon without taking a drink, and how to save your junkie crush from a crack house.

Celebrity Appeal Keeps Magazine Circulation Mostly Higher [Katharine Q. Seelye, New York Times]

• Weezer fans can gear up for Rivers Cuomo's long awaited graduation parties. After 11 years, the abstinent, zen version of Van Wilder will finally get his B.A. in English from Harvard this Spring. [NY Times]

• Reality show creators would love to put cameras in the bathrooms at the Oscars, to catch the girls fighting and the guys doing drugs. Because nobody's ever heard of a girl being caught doing drugs on tape. [LA Times]

• Unfortunately, we were walking by Union Square (with tourists no less) during this NYC tragedy. [Gothamist]

• William Bastone, the man who exposed James Frey, exposes his own story to Gelf magazine. [Gelf]

• The New York Times' Hollywood issue just cant compete with Tom Ford's tongue and Scarlett Johansson's ass. [NYO]

We all know James Frey's side of the story by now. He can't remember shit about his life because he was on crack, he's not a journalist, yada, yada.

We know what Oprah, Jack Shafer, and James McManus think, too. But, the mystery man we haven't heard from yet is Frey's editor, Sean McDonald. Until today, when New York slapped the exclusive first interview up on their spankin' site. (No competition with Us Weekly on either category.)

The article reveals that the writer and editor were close friends, caught fights at the Garden together, and went on secret fishing trips to Brokeback Mountain. Oh, wait, sorry. We were on crack this morning, our stories are all confused.

Anyways, Frey's editor/BFF doesn't apologize, or really offer any insight as to why other top Random House editors believed every word out of an ex-junkies mouth. He simply throws his betrayed, victimized a'la Paris Hitlon hands in the air.

McDonald offers neither explanations nor excuses for his delay in addressing his role in the scandal. “I’ve been learning about all of this the same way as everybody else,” he says. “And it all bewildered me and confused me.”

“I was always working on the understanding that the story was true,” he says. “I did think every fact was accurate, and I never tried to push those facts beyond what was there.” And now? “I can’t deny that my faith in James has been rocked some in the past couple weeks,” he says. “I still think he’s a really talented writer. I think I should leave it at that.”

Except that Frey's not really that talented a writer. The only reason the story was any good was because of all the crazy shit that was happening to him. That's called being "a very talented story teller." Which also translates to "a very good liar."

The article also questions whether or not writers will continue to work with McDonald. Hey, why not, he turned that million little piece of shit of into a million little dollars, blog entries, and Op-Ed articles. Now that's talent.

James Frey's Enabler [Dave Itzkoff, New York]

In a somewhat halfsie apology from author/liar James Frey, his fictional memoir's lack of truthiness is mostly blamed on the writer's history of crack abuse.

"A Million Little Pieces" is "a subjective truth, altered by the mind of a recovering drug addict and alcoholic. Ultimately, it's a story, and one I could not have written without having lived the life I've lived."

See, the problem with that little statement is that isn't going to help people overcome their meth addictions. It's only going to send a million little crackheads over to Random House with the thought that they, too, could hallucinate an untrue story and make a killing.

James Frey's note to the reader of A Million Little Pieces [Random House via AP]

• You may be able to catch her lunching at Michaels, but today is your last chance for Rachel Sklar's Canadianist take on the incestuous world of New York media. [Fishbowl, NY]

• No way, that little James Frey story increased traffic to The Smoking Gun? We would have never guessed that in a million little obvious years. [Media Week]

• Spin it right round baby — the little music mag that is still trying to say it could may be getting a home. [WWD]

• Don’t worry New York Times, nobody really expects you to understand the ancient Chinese art of getting names right. [NYO]

• While we were out avoiding the reality that George W. Bush is still our president, some of the real journalists were actually paying attention. [Slate]