I like the graphic associated with the post in Google Operating System - The Unlikely Integration Between Google News and Digg - it's hard to see where Digg would be used to re-rank Google News once Google acquires Digg.

More likely, the real reason Google is buying Digg is ….to interface it with Google's organic search results - though you'd think, in true Google fashion, if they were going after Digg's success they'd just copy/clone Digg instead of buying it.
Perhaps there is a patent issue involved here - or something that limits what Google can do with it's new Search Interface - Future of Search Engine Optimization - Google’s New Search Interface.
BTW, I wrote about …some other news the other day and I'd like everyone who reads this blog to also subscribe to www.theanalyticsguru.com RSS Feed, for the reasons I outlined in that post.