Ravi,
Let's do something new and dial this discussion back and start over. I admit that I came out of the gate unnecessarily antagonistic, out of habit I suppose, and for that I apologize.
The truth is, philosophically I agree with you completely. What Breitbart did was sleezy and IMO not 'really' anything like what the Daily Show does. But in neither case is it 'satire' as you alluded. Tina Fey doing Sarah Palin is satire. Stephen Colbert doing a conservative pundit is satire. The Daily Show stringing together several clips of Fox News is not satire. It's comedy, but not all comedy is satire. I'm going to make the bold assumption that you understand this, but regardless, it's beside the point.
It is my strong contention that if Sherrod wins this case, it will be used as precedent in the future for lawsuits against The Daily Show and other shows like it.
I really don't think slander laws differentiate between clips edited for comedy and clips edited for political spin. And furthermore, I think it would be dangerous to try. If she wins, it will be a blow to free speech and IMO that's never a good thing.
You're welcome, as always, to disagree with me.