The Fox affiliate in Chicago is reporting that Rep. Rahm Emanuel (D-IL), Obama's incoming chief of staff, spoke with Blagojevich directly about who would fill Obama's Senate seat and that the conversations occurred during the period when Blagojevich was being recorded by the feds.

It's not clear what this means, and the point can't be made often enough that it would be really odd if the Obama team was not talking to Blagojevich about the seat. But as a commenter at TPMmuckraker notes, one thing is perfectly clear:

Rahm talking to Blago: if they ever get hold of a transcript, it will have to be entirely redacted with "bleeps."