No longer a rumor. According to the The Baltimore Sun:

The Orioles have agreed to trade reliever Chris Britton to the New York Yankees for starting pitcher Jaret Wright and cash, according to two team sources. ...

Along with Wright, a 30-year-old right-hander with a 68-57 record over 10 major league seasons, the Yankees have agreed to send the Orioles $4 million, according to sources. That is the amount it would have cost New York to buy out Wright's 2007 option.

Britton, a 23 year old right handed reliever, put together a nice rookie campaign in 2006, pitching in 52 games, going 0-2 with a 3.35 ERA after beginning the season at AA Bowie, where he pitched in 13 games going 1-0 with a 2.81 ERA. He never pitched a game in AAA and Baseball America said he had the "best control" of any pitcher in the Orioles system last year.

Seems like a good deal to me.

Via Chris (a quick guy!) and ESPN.com.