I'm extremely late to the table on this one. I happened to be reading through a back issue of The New Yorker today and the article mentioned this showdown between David Letterman and Bill O'Reilly on "The Late Show" and I didn't recall the event, so I looked it up on the internet and the first thing I came to was a blog entry with the video. So I gave it a look and damn if Letterman didn't hand O'Reilly his ass.
Yeah, it's tough to stay above the current events water sometimes when you're neck deep in entertainment journalism - stuff that, by and large, doesn't matter. So forgive the excessive tardiness, but this just made my day.
Anyway, I should link to that blog entry, which has a link to the video:
http://onegoodmove.org/1gm/1gmarchive/2006/01/letterman_1_ore_1.html