This is a rush transcript from "FOX News Watch," May 3, 2008. This copy may not be in its final form and may be updated.

JON SCOTT, FOX NEWS HOST: This week on "FOX News Watch," Barack Obama denounces his former pastor. Will it be enough for the press?

Hillary enters the No Spin Zone. Are Democrats taking a new look at FOX?

Has John McCain found a safe place in the media spotlight?

The D.C. Madam is found dead. The conspiracy theories spring to life.

Plus, was Miley Cyrus exploited by "Vanity Fair"?

And late night pokes fun at Reverend Wright and the press.

First the headlines, then us.

(FOX NEWS BREAK)

SCOTT: On the panel this week, Jane Hall of the American University; syndicated columnist Cal Thomas; Jim Pinkerton, contributing editor and writer for the "American Conservative" magazine, and Patricia Murphy, founder and editor of citizenjanepolitics.com, a non-partisan website.

I'm Jon Scott. "FOX News Watch" is on right now.

(BEGIN VIDEO CLIP)

REV. JEREMIAH WRIGHT, FORMER TRINITY UNITED CHURCH OF CHRIST PASTOR: Politicians say what they say and do what they do based on his electability, based on sound bits, based on polls, Huffington, who is doing the polls. Preachers say what they say because they are pastors. They have a different person to whom they're accountable.

SEN. BARACK OBAMA, (D), PRESIDENTIAL CANDIDATE: At a certain point, if what somebody says contradicts what you believe so fundamentally, and then he questions whether or not you believe it, in front of the National Press Club, then that's enough?

(END VIDEO CLIP)

SCOTT: Well, Barack Obama there, responding on Tuesday to his former pastor's remarks at the National Press Club a day earlier.

Cal, let's take a look at some Rasmussen polls just out. The polling numbers indicate that 58 percent of voters in this poll say that Obama denounced Wright for political convenience and not because they were actually outraged. 30 percent feel that he was honestly outraged. Does the media coverage reflect that?

CAL THOMAS, SYNDICATED COLUMNIST: Well, yes and no, to take a middle position. Look, there are two elements at work here. Number one, it's hard to believe Obama, after 20 years as a member of this church, didn't know what Reverend Wright believed. About everything, theology, politics and the rest. Clearly, his biggest outrage was Wright questioned his, Obama's, creditability as political leader and potential president. That's why he believes he threw him under the bus. Not all of these other things.

The second thing is everybody plays to their own audience. For Wright to stand before the National Press Club and say he's a pastor and answers to a higher authority, he was appealing to the black liberation theology believers in his congregation and around the country. He was playing to his audience just as much as Obama was playing to his.

SCOTT: Jane, Charles Cowheimer wrote, he writes that Wright didn't say anything in that press conference at the National Press Club that he hasn't said before in the snippets of sermons and so forth that Reverend Wright supported -- I'm sorry, that Barack Obama always supported.

JANE HALL, AMERICAN UNIVERSITY: I think that people who do not believe Obama and who want to make Reverend Wright the candidate instead of Barack Obama are going to say things like that. They're never going to believe that there's any other side to this. I think it is really regrettable.

I think this is this year's Swift Boat, this year's Willie Horton. Not that there's not something to it and not that Obama shouldn't have disavowed this much sooner.

Living in the FOX universe, I kept thinking, don't these people know this beautiful speech on race didn't answer a lot of people's questions about him.

But I think there's a media question here. Are the media going to let this go or endlessly pair him visually and hang this around him and is that only issue we're going to talk about?

SCOTT: Should the media let it go, Jim?

JIM PINKERTON, CONTRIBUTING EDITOR & WRITER, "AMERICAN CONSERVATIVE": What was it Reverend Wright said in that beautiful speech that Jane liked so much? I can no more disown Reverend Wright than I can my own...

HALL: I didn't like that speech. I said he didn't do what he needed to do.

PINKERTON: Oh, you said many good parts, many good parts.

The point is, look, Wright has -- as Fred Dicker wrote in the New York post, Wright has gone out of his way to torpedo, destroy, annihilate the Obama campaign, apparently because Obama's distancing himself from the past and Reverend Wright. And Wright is mad because he has his own constituencies of black liberation crazies and he's got to appeal to them. And they're different from Obama. My old boss, Mike Huckabee, made the point, obviously, Wright wants Obama to lose. And he's succeeding. And Obama was way slow...

SCOTT: Are the media being manipulated?

PINKERTON: I think it's obviously a legitimate story. Look, the polls you're citing show people care about this. You can't get elected president on a radical multicultural ideology. The media would love to see Obama get elected president. They realize he probably can't because of this.

SCOTT: Well, Patricia, citizenjane, the reports out of Indiana indicate that people are not going to be deciding on Obama based on this whole Reverend Wright controversy. If that's the case, are the media making too much of it?

PATRICIA MURPHY, CITIZENJANEPOLITICS.COM FOUNDER & EDITOR: I think it will be a part of people's calculations.

I'm not sure it's their main calculation. I was in North Carolina reporting on the race earlier this week and a talked to a lot of people at Obama events, Clinton events and around town. This is not primarily on their minds. They're worried about gasoline, food prices, worried about paying Bills. They don't care as much about as the Obama Wright factor. This is right over the plate for the media. He came to the National Press Club. When Obama denounced this, he said you're questioning my values at the National Press Club. He's gone to the press to defend himself and I think -- it's playing out in the media but the voters don't care about it as much.

PINKERTON: The public didn't care, then as Jane alluded to, Willie Horton and Swift Boat, in both those cases, Republicans defended the issue. So if it's just a media creation, Dukakis and Kerry would have won. But they lost because it's not...

HALL: It's not a media creation. It's complicated. One is not responding. The other is the media endlessly replaying something.

PINKERTON: Or the American people saying that raises...

HALL: Or maybe it's...

PINKERTON: Hold on. Let me finish. That makes it an interesting point about the candidate that we didn't realize. Thank you for bringing that to my attention. Now I'm voting Republican.

SCOTT: All right, we'll be talking about this one for a while. And if you want to hear what we're talking about during the commercial break, go to our website, foxnews.com/foxnewswatch.

We'll be back in two minutes with this.

(BEGIN VIDEO CLIP)

ANNOUNCER: It's a "Factor" first as Hillary enters the No Spin Zone

BILL O'REILLY, HOST, "THE O'REILLY FACTOR": Aren't you surprised?

SEN. HILLARY CLINTON, (D), PRESIDENTIAL CANDIDATE: I'm running for the toughest job in the world.

ANNOUNCER: Will her new media moves produce a primary payoff?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

O'REILLY: You're looking me in the eyes so I'm going to believe you. Are you surprised that FOX News has been fairer to you than NBC News and a lot of the other liberal news networks. Are you surprised?

CLINTON: I wouldn't expect anything less than a fair and balanced coverage of my campaign.

(END VIDEO CLIP)

SCOTT: Did you catch that? Hillary Clinton talking with Bill O'Reilly. Millions of Americans did.

What is going on here, Jane Hall? Hillary had not appeared with O'Reilly. He's been after her for years. Barack Obama all of a sudden on "FOX News" Sunday. What's going on?

HALL: The Democrats said they had a 50-state strategy and they were not appearing on a network that is the highest rated and has a lot of voters who are independent, who are people they need to reach. And I think Hillary Clinton decided that it was worth going on.

The irony is I think -- when I was talking to people, her supporters, these probably did herself a tremendous amount of good in terms of coming off as confidence. She got to answer Reverend Wright without bringing up Wright. O'Reilly treated her with real respect and she did very well.

THOMAS: There's a reason for that. This is the political equivalent of sexual tension. Everyone wanted to see this to find out what was going to happen.

Look, clearly the boycott of "FOX News" is over from the Democratic Party. This diminishes MoveOn.org and the "Daily Coast" and some of these other far left groups who for a while -- Howard Dean is going to be the final one as he appears with Chris Wallace on "FOX News" Sunday. So the boycott is over, just like the boycott of Disney by the right wing groups and others. Boycotts are only good if they work. This has not worked.

SCOTT: Patricia, some of the blogs, Daily Coast, MoveOn.org and so fourth, they're steamed those kinds appeared on "FOX News." Is this going to hurt them with core constituencies?

MURPHY: I think it will hurt Hillary Clinton. But she's had a long time fissure for quite a while. So I think she had already lost that group of voters.

SCOTT: But is that counterbalanced by people she might have picked up who like O'Reilly?

MURPHY: Absolutely. I mean, 3.6 million viewers saw that and it has been distributed on the Internet time and time again. For her to challenge Barack Obama, debate me now, debate me anywhere, anytime. If she hadn't gone on O'Reilly -- you can't run from one debate and chase another. I think she did herself a lot of favors.

PINKERTON: The Democrats in their heart of hearts would love to run in the MSNBC primary. And Keith Olbermann and Dan Abrams would decide who the nominee is. Unfortunately, for Hillary, she lost that primary to Obama. Bill O'Reilly is quite right when he says that NBC is the Obama headquarters. Looking at Andrea Mitchell's face when they had the report, the O'Reilly interview with Hillary, the middle of last week, she was spitting out the words "FOX" because she was so mad.

The point is, as Patricia said, there's a lot of people watching FOX, Independents and there are patriots and gun owners and they happen to be Democrats. And Hillary is so desperate to win, she's even willing to do this. That says something about how strong a candidate she'll be in the general, if she gets through this nomination process. If she'll go on FOX once, she'll go on FOX twice. And then she might really be a threat.

SCOTT: It was a little silly, wasn't it? These two people, Barack Obama and Hillary Clinton, aspire to the toughest job in the world, and yet they don't want to talk to journalists?

HALL: I think it was Jay Leno who said how can they fight al-Qaeda if they -- maybe it was Roger Ellis. How can he go against al-Qaeda if he's afraid of Brit Hume? That is a legitimate question.

I hate to say this. I felt this for a long time. It didn't seem to be my place to tell the Democrats this. But if you live in the FOX universe, you know how popular it is. You know that they're going to reach viewers they wouldn't reach, it seems mystifying, except I know people on the left who say they dissed us, they've gone after him, Obama, hard on Reverend Wright. He shouldn't go on.

SCOTT: Was Bill O'Reilly fair to Hillary Clinton, for instance?

MURPHY: I think he was. If there were instances where he said something like here's why you're wrong, she had a chance to come right back at him. They had a really lively debate. I think it was great for both of them.

I'll say, I worked on Capital Hill for Democrat. There's a great temptation not to be challenged. But she is so good on her feet, this was good for her.

THOMAS: That's exactly right. And compare that, for example, with Suzanne Malveaux of NBC's interview with Michele Obama with Caroline Kennedy sitting next to her and asking hard charges questions like, well, how did that make you feel? This was a Dr. Phil moment. This wasn't real journalism.

PINKERTON: That's the point. It's the combat on television that makes it most compelling. Richard Nixon went to all his enemies in 1968, went before them, and got elected. That tells you something.

SCOTT: Time for another break. As coverage for the candidates continues, is John McCain settling into a safe place? We'll be back with this.

ANNOUNCER: Miley's photo flap. Did "Vanity Fair" take advantage of the teen star just to make a buck? Could the controversy end her career?

(COMMERCIAL BREAK)

SCOTT: John McCain hit the road this week making stops in Florida and Pennsylvania to introduce Americans to his health care plan. Now his tour's been covered by the press as has his proposal for a gas tax holiday. But he's not getting the intensity of coverage that Obama and Clinton are getting. I guess that's to be expected.

Patricia, is he playing it about right for a nominee who's essentially got the nomination wrapped up?

MURPHY: I think he's using his time well. We know he is fund- raising. He does these things that the media loves to cover with him going to Selma, Alabama, and New Orleans.

I think the tone will change for him shortly. He's going to be speaking to the NRA, and he's going to be talking about the importance of conservative judicial nominations. That's throwing red meat to the people who need it. But the media doesn't like that kind of a story line out of John McCain. I would expect the tone of his coverage to change.

THOMAS: The Democrats are a far better story. It's the World Wrestling Federation compared to some academic exercise. McCain will get his moment. The "New York Times" and the big broadcast media all lined up getting ready to trash him. That will come after this story settles. He's too old, pandering to the right. He's flip-flopping. It's the third Bush term. Those are just four elements you're going to get.

PINKERTON: He will get his moment in California, all those artillery shells that are being loaded up against him.

But I will say this, that Ken Walsh, who is a reporter for "U.S. News" wrote a book a few years ago called "Feeding the Beast." The beast of course is the media. You've got to feed it red meat. McCain is making the mistake of not throwing enough -- He should go out and debate Reverend Wright, that would get some attention. If he gives out earnest speeches on important topics, the media are going to be bored. They're more interested in following Reverend Wright around to see what his next eruption is.

SCOTT: Once they're a nominee, obviously people are going to be covering McCain and there's going to be all kinds of stories. Has he started keeping his powder dry?

PINKERTON: I think there's just the value of -- every day in the media is a billion dollars worth of what they called earned media, free publicity. If you don't spend it, you lose it.

SCOTT: Let's talk about Deborah Jean Palfrey, the woman that was dubbed the D.C. Madam. She was found dead Thursday at her mother's home in Florida. Palfrey was convicted two weeks ago of running an escort service that catering to the capital's power elite. Officials have called Palfrey's death an apparent suicide. She left behind notes for her family.

But less than 24 hours after her death, press reports were already picking up on conspiracy theories asking whether she really had committed suicide or was a victim of murder.

Did she become, Jim, the...

PINKERTON: The Vince Foster? That was a terrible tragedy and there's another woman associated with the same escort service who apparently committed suicide. All can you guarantee is, whatever the facts are, the conspiracy will not let them get in the way. Frankly, I'm a little curious too about this.

MURPHY: One quick thing. I think the media coverage of this, let's these men off scot-free. What's going on with David Vitter? What is going on with Eliot Spitzer? These women are committing suicide, going to jail? I know that the law treats men and women unfairly in the same sense. But these women are demonized and the prostitute who slept with Eliot Spitzer has gone into hiding. Meanwhile, these mean are living happily on the upper east side of Manhattan. That's frustrating to watch.

PINKERTON: Spitzer got off too easily.

MURPHY: Well, I mean, he lost his job.

SCOTT: One of the arguments is the prosecutors could have called David Vitter to the stand if they thought he had something to add to the Palfrey prosecution.

MURPHY: He's continuing in his job. He's a free man and we have these women killing themselves and being prosecuted in the media if nowhere else.

SCOTT: Let's talk about another case that could involve a media double standard: Miley Cyrus. Did you hear about this one, 15 years old? Take a look.

Here's -- here's some video but she appeared in the new issue of "Vanity Fair" that's just out, photographer Annie Leibovitz. There is the picture, Leibovitz's portrait of the previously wholesome actress that stars as Hannah Montana. And it has sparked an uproar.

On Monday, Cyrus issued this statement. She writes, "I took part in a photo shoot that's supposed to be artistic. And now seeing the photographs and reading the story, I feel so embarrassed. I never intended for this to happen and I apologize to my fans, who I care so deeply about."

Cyrus is supposed to perform at a concert at Disney World tonight. So, what do you think, Jane?

HALL: This is one I know something about. As a mother of an 11-year- old daughter that watches this show. This show is a huge million, billion franchise for her. Young girls watch her, look up to her, think she's real, think she's a role model.

I believe her apology. First I was mad at her. Then I thought, you know what, I'm mad at "Vanity Fair" and Annie Leibovitz and her handlers. I've been at celebrity photo shoots. It's amazing how naive people can be. We have so sexualized young girls in this is this culture that nobody really thought that was anything other than arty to have her in a bed sheet with her hair tussled like she just got out of bed. The shots with her father are pretty strange, bordering on strange. That seems to be our definition of art.

I blame "Vanity Fair." I think people are out to try to get something new on her. And that's what the article in "Vanity Fair" said. They're tired of the wholesome. They want something new.

SCOTT: I don't like the shot either, Cal, but in "Vanity Fair", the actual input she makes no bones about that shot. She thought it was OK.

THOMAS: I think it was a major mistake. But, look, I think Hannah Montana proves that virtue sells. It can make money. And a lot of adults, as Jane says, are looking for decent role models especially for their daughters. What a lot of people are afraid of, she's going to become like Charlotte Church, which once sang for god, but now seems like she's channeling Satan.

MURPHY: Or like Jamie Lynn Spears, who is pregnant and lost her show on Disney. So Disney is clamping down on the billion dollar enterprise.

SCOTT: We have to take one more break. When we come back...

ANNOUNCER: Reverend Wright hits the airwaves. And the late night comics take a look, next on "News Watch."

(COMMERCIAL BREAK)

SCOTT: Barack Obama's former pastor, Reverend Jeremiah Wright, capped off his media tour with an appearance at the National Press Club. His pronouncements and Obama's responses drew attention of the late night crowd. This is how some of them saw it. Take a look.

(BEGIN VIDEO CLIP)

JAY LENO, HOST, "TONIGHT SHOW": Well the State Department announced today the most dangerous place from the world, no longer the Middle East. It is now between Jeremiah Wright and a microphone. That's the most devious place. You will get trampled.

STEPHEN COLBERT, HOST, "THE COLBERT REPORT": Well, today a disgusted Senator Barack Obama broke with his pastor in no uncertain terms saying, "I am outraged by the comments that were made, saddened over the spectacle. They offended me. I find the comments appalling. I am completely opposed to this. It is completely opposed to what I stand for. It only makes me angry. It saddens me. It shocked me. It surprised me. Directly contradicts all I have done in my life. All it was was a bunch of rants that are not grounded in truth. I find it objectionable an offensive. Reverend Wright does not speak for me. He does not speak for our campaign. I don't think anybody could attribute those ideas to me."

A clean break, leaving only one question.

UNIDENTIFIED SHOW HOST: Does this put the Wright controversy behind Barack Obama?

UNIDENTIFIED GUEST: I don't think so.

COLBERT: Oh, thank God. Oh, thank you Jesus. Oh, we almost lost you today.

Jimmy, take it away. I can't even think about that. Take him away...

We will have more on this Reverend Wright controversy as often as we can.

(LAUGHTER)

(END VIDEO CLIP)

SCOTT: Our thanks to Jane Hall, Jim Pinkerton, Cal Thomas and Patricia Murphy.

I am Jon Scott. Thank you for watching. Keep it here on the FOX News Channel. The "FOX Report" is up next.

For more information and exclusive content related to "FOX News Watch" go to www.foxnews.com/foxnewswatch

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