Well, according to the New York Times, it's over, and the only open question is when Governor Spitzer's resignation will be announced.
Per CNN, transition talks have started between David Paterson's and Eliot Spitzer's offices.

Oh, and way to go, Bush Justice Department. You nabbed yourselves another Democrat.
Congratulations, also, to the people of New York. Your governor just went down over a Federal investigation into prostitution; because of that, you have a new Lieutenant Governor, Joe Bruno, whose consulting company has been actively investigated for public corruption by the FBI since Spring 2006.
No word yet on whether that investigation will ever be completed, of course.
[Update]: Per the TU quoting Spitzer's office, reports of an impending resignation are inaccurate.