Sandro Magister has an excellent commentary on the Holy Father's 'rethinking' of clerical celibacy. No, he isn't doing away with it, but rather giving priestly celibacy a deeper theological foundation to help ground the understanding of the necessity of priestly celibacy not in a pragmatism, but as an eschatological sign of the Kingdom of God. Celibacy marks out the priest as totally God's, and as such is a sign for the rest of the faithful and for the world.
Be sure to read the whole post, which also includes the Holy Father's comments on Vocations, further reflections on priestly celibacy and other remakrs given to priests over the last week as well.
It is the speech that he addressed to the Roman curia on December 22, 2006, commenting on his travels outside of Italy that year.
"Celibacy, in force for Bishops throughout the Eastern and Western Church and, according to a tradition that dates back to an epoch close to that of the Apostles, for priests in general in the Latin Church, can only be understood and lived if is based on this basic structure. The solely pragmatic reasons, the reference to greater availability, is not enough: such a greater availability of time could easily become also a form of egoism that saves a person from the sacrifices and efforts demanded by the reciprocal acceptance and forbearance in matrimony; thus, it could lead to a spiritual impoverishment or to hardening of the heart. The true foundation of celibacy can be contained in the phrase: 'Dominus pars' – You are my land. It can only be theocentric. It cannot mean being deprived of love, but must mean letting oneself be consumed by passion for God and subsequently, thanks to a more intimate way of being with him, to serve men and women, too.
"Celibacy must be a witness to faith: faith in God materializes in that form of life which only has meaning if it is based on God. Basing one's life on him, renouncing marriage and the family, means that I accept and experience God as a reality and that I can therefore bring him to men and women. Our world, which has become totally positivistic, in which God appears at best as a hypothesis but not as a concrete reality, needs to rest on God in the most concrete and radical way possible. It needs a witness to God that lies in the decision to welcome God as a land where one finds one's own existence.
"For this reason, celibacy is so important today, in our contemporary world, even if its fulfilment in our age is constantly threatened and questioned. A careful preparation during the journey towards this goal and persevering guidance on the part of the Bishop, priest friends and lay people who sustain this priestly witness together, is essential. We need prayer that invokes God without respite as the Living God and relies on him in times of confusion as well as in times of joy. Consequently, as opposed to the cultural trend that seeks to convince us that we are not capable of making such decisions, this witness can be lived and in this way, in our world, can reinstate God as reality."