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It is not yet clear whether Shermer will sue PZ for defamation; however, this seems more likely based on the letter than it did previously. Of equal interest is the question of PZ's immediate response. At the time I am writing this post, PZ has still not removed the post in question or issued a retraction. He says that he been in touch with Ken White at Popehat to arrange legal assistance for himself. This could mean that he's planning to fight, but I suppose that will be evident soon enough if the post containing the accusations against Shermer remains much longer.
Based on the relevance to the atheist movement, skeptic community, and blogging in general, this seems like one to watch closely. It could end up having far-reaching implications.