NBC finally realizes a Jay Leno hour at 10 pm is a major mistake. It wants Leno back at 11:30. There's a problem. Conan O'Brien currently has that time slot, another mistake.
There are two scenarios floating around. One has Leno doing a half hour show at 11:30, followed by O'Brien at midnight. The other is O'Brien leaving the network totally, but with a fat settlement.
I've never been an O'Brien fan. You can't trust a host who attempts to be funnier than his guests. O'Brien tries-- and fails.
It will take a while for Leno to get the stench of failure off him, even after a move back to 11:30. His 10 pm show wasn't funny, wasn't well constructed, and featured b-list guests, at best.
On the other hand, people like Leno. You can't teach that. You can't bottle that. You can blame the 10 pm failure on the time slot and the show NBC built around Leno.
NBC is in a no-win position, but it's clear the network has to do something. Leno provides a poor lead-in to the 11 pm news across the country. O'Brien has lost a huge chunk of the "Tonight" show audience. Affiliates are in revolt.