Looks like the AP has completely backed off on its idea of holding bloggers to account for quoting their news articles. AP now appears content to have "provided information" to Drudge Retort. Full statement, via PaidContent:
"In response to questions about the use of Associated Press content on the Drudge Retort web site, the AP was able to provide additional information to the operator of the site, Rogers Cadenhead, on Thursday. That information was aimed at enabling Mr. Cadenhead to bring the contributed content on his site into conformance with the policy he earlier set for his contributors. Both parties consider the matter closed.
"In addition, the AP has had a constructive exchange of views this week with a number of interested parties in the blogging community about the relationship between news providers and bloggers and that dialogue will continue. The resolution of this matter illustrates that the interests of bloggers can be served while still respecting the intellectual property rights of news providers."