Kathy seems to have a pretty trustworthy source who claims that this video does exist. But there are two problems. 1.) "Whitey" seems really really archaic. These days, black folks don't even have a real slur for white people. "White folks" or "White people" seems cutting enough. 2.) If this video does exist, it stands to reason that McCain wouldn't be the only one who had it, no? There must be reporters and bloggers hunting this thing down. Furthermore, at the very least, it would seem that the Obama campaign would have the video, and would just release it themselves. The likely scenario, I think, is that there may be a video of Michelle that's in the "first time in my adult life, I'm proud of America" category. I just can't see it being much bigger than that.
UPDATE: The more I think about this, the fishier it sounds. First off, even in the worst Jeremiah Wright videos, there is no evidence of "denouncing whitey." If we remember his worse offenses are denouncing America. But there is no "kill whitey" or "goddamn white people" talk in any of the tapes. Contrary to popular belief, black people do very little denouncing of whitey. In fact this sounds like the sort of thing that would be ginned up by --and for--someone who doesn't actually have much substantive contact with black people.
It also doesn't square well with what we now about Michelle Obama. I'm not saying we know much, but isn't it convient how the tape more stands in line with some of the more baseless whispering which has held Michelle to be black rage incarnate? Meanwhile the real Michelle Obama's children have a white grandmother, and her and Barack have long moved in very integrated circles. I'm not making the "I have white friends too" argument, but taken as a whole, this thing sounds highly, highly suspect. The worst part about it is, much like the Muslim rumors, it doesn't need to be true. No tape ever need be discovered, for the idea that Michelle said this to take hold in the popular conscience. I think that's why we haven't heard this in the MSM. It's also probably why I should just shut up now.