Earlier this evening, David Letterman told his talk show audience that he was the victim of a $2 million extortion attempt—and that he had sexual relationships with staffers. He said (the show airs at 11:35 p.m. on WCBS 2), "This morning, I did something I've never done in my life. I had to go downtown and testify before a grand jury." [Update: Here's video]

According to the Daily News, "The 'Late Show' host received a package from an individual who claimed to have information on his dalliances and said he would be outed unless he came up with $2 million." Letterman went to the Manhattan's DA office, which "instructed Letterman to mail a phony $2 million check to the individual, which led to the extortionist's arrest on Thursday."

Letterman said of the affairs with staffers, "My response to that is, yes I have. Would it be embarrassing if it were made public? Perhaps it would. I feel like I need to protect these people -- I need to certainly protect my family."

The News spoke to Letterman's mom, Dorothy Mengering, who said, "I knew he was being blackmailed and that someone was arrested today. So far that's all I know. I'm looking forward to seeing the show tonight to see what he has to say." She added that she heard about the extortion attempt from Letterman's wife of 7 months, Regina Lasko (she and Letterman had "been together" since 1986 and have a 5-year-old son).

UPDATE: According to TMZ, the identity of the arrestee "is Robert Halderman. He's 51 years old and lives in Norwalk, CT.... He is an employee of '48 Hours' and has been suspended pending results of the investigation." Radar Online, which calls him a "former producer," says he lived with one of the women that Letterman was involved with. Plus: "Sources tell RadarOnline.com that Dave’s sexual relationships happened before the marriage, but during his relationship with Lasko. His relationship with the woman connected to the extortionist has apparently been over for a long time."

UPDATE 11:56 p.m.: Watching Letterman discuss the extortion on the show and it's pretty creepy (though Letterman sets it up with some humor): Apparently he found a package in his car at 6 a.m. from a man who says that he knows the horrible things that Letterman has done—and with apparently evidence of these horrible things.

Letterman launches in a description of how the guy wanted to write a screenplay using details of these things and wanted some money for it, how he contacted his lawyer who set up a meeting with the extortionist, and then how the Manhattan DA's office said it was blackmail and told Letterman to set up the sting. When Letterman mentions the $2 million amount, the audience gasps.

All along the audience is laughing throughout Letterman's description, but doesn't know why Letterman is being shaken down. He then says, "The creepy stuff is that I have had sex with women who work for me on the show"—silence—"...My response to that is, yes I have." Cue laughter! "Would it be embarrassing if it were made public? Perhaps it would... especially for the women. But that's a decision for them to make if they want to come public with the relationships..." After thanking the Manhattan DA's office, Letterman said, "I feel like I need to protect these people -- I need to certainly protect my family... I hope to protect my job... I don't plan to say much more about this particular topic so thank you for letting me bend your ear."