January 12, 2006 at 08:12 PM EST

UPDATE: PopWatch got punk’d too. Contrary to what Reuters reported yesterday (and what I wrote below), Random House says its Doubleday imprint is NOT offering special refunds to disgruntled purchasers of James Frey’s book. How apt: a hoax about a hoax.

James Frey finally addressed the scandal surrounding his memoir A Million Little Pieces by appearing on CNN’s Larry King Live last night, where he used the phrase ”essential truth” about seven times to describe his book. He said that just 18 of the book’s 432 pages were in factual dispute, and that an embellishment ratio of 5 percent was ”appropriate for a memoir.”

The show’s most dramatic moment may have been a phone call from Oprah Winfrey, who finally weighed in on the story, calling it ”much ado about nothing.” She continued to back Frey’s memoir as a selection for her book club and as a cautionary tale that could help people struggling with addiction. If she was ”disappointed” with anyone, it was Frey’s publisher, who she said she’d relied on to vouch for the authenticity of the book as non-fiction.

The publisher, Doubleday, issued a statement Tuesday defending Frey’s literary license. ”By definition, [a memoir] is highly personal,” the statement said. Nonetheless, on Wednesday, Doubleday said it would refund the purchase price of the book to any buyer who complained (and who had bought Million Little Pieces directly from Doubleday), a step publishing industry insiders told Reuters was unprecedented.

What do you think, readers? Is 5 percent an ”appropriate” amount of fudging for a memoir? Was Oprah right to stand by Frey? Do you still think his tale has value?

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