Update 2-18-2009: If you hadn't heard already O'Keefe was arrested for trying to illegally wiretap a US Senator. I don't know what's more frustrating - the fact that Mary Landrieu probably is really corrupt - or that teabaggers like O'Keefe are so blind to the massive corruption in the Repuglican Party.
James O'Keefe's videos are highly edited. So highly edited that you'd have to have a hole in your head to believe all of James O'Keefe's claims. And the only unedited audio released is from the Washington, D.C. "investigation". As long as this is the only unedited release, that is the only one that counts as evidence.
ACORN is a favorite target of the Right Wing because they tend to support progressive causes and run voter drives for poor minorities which tend to favor Democrats. Memorably in 2008, the Right Wing tried to tarnish ACORN by claiming voter fraud. This turned out to be bunk.
So an enterprising young Republican, O'Keefe, decided to dig up some dirt. Well he did dig up dirt, but he didn't dig up what he thinks. The facts, according to my ears, are that at the Washington DC office, ACORN employees or volunteers do give O'Keefe and his pretend hooker girlfriend advice on how to get a home loan and how to file taxes even though his pretend girlfriend is a prostitute. He is not her pretend pimp as stated in some places - he is her pretend boyfriend. And only once towards the end (~29m 50s) was there a mention that she was planning on using the money earned to help him with a future political campaign.
By and large this audio clip does not prove much. The way I see it, these ACORN employees who help extremely poor people on a daily basis, who are not shocked anytime they hear that somebody trades sex for money or uses illegal drugs, were doing what they always do: ignoring idealism and giving practical advice to help someone survive. They were not judging, but helping someone they perceived as poor and unable to fit into "normal" society. I think the dirty laundry O'Keefe really aired is how differently poor people live compared to the Middle Class. Following laws is all well and good, if you can feed and shelter yourself.
Of course the Right Wing didn't care about laws when George W Bush was President, but I'll not digress.