The originations of the incident came from the NAACP organizing an anti-Tea Party stance, with M. Obama making an appearance the very next day, thus giving the impression that the White House was complicit in this attempt to smear the Tea Party as racist.
Breitbart then posts a video showing members of the NAACP seemingly approving of a racist story being shared by Sherrod. The video becomes part of the ongoing story of the NAACP's anti-Tea Party stance, making charges of racism while seemingly supporting racism when it is applied to whites.
Then that story becomes greatly elevated by the Obama administration's cartoonish rush to judgement against Sherrod, and her firing/resignation, followed up by the White House apologizing and the NAACP's laughable claim of having been "snookered" - even though they were present at the very presentation by Sherrod just months earlier.
Fox News did nothing wrong - it simply reported the still developing story regarding the NAACP and its anti-Tea Party positions, and included both the initial edited video and the later full video as part of that story.
It is still uncertain if Breitbart edited the video, or was simply given the edited version. Hopefully that will come out soon, for if Breitbart did in fact do the editing, much blame will deservedly come his way.
The greatest fault for the entire story lies with the Obama White House - a clear case of bereft leadership, showing just how weak, thin skinned, and reactionary it has become...