UK Climategate Investigation Conclusion: Hiding the Decline was “Misleading”

So, after the text they quote ending "... the figure supplied for the WMO Report was misleading", the investigation report says:

We do not find that it is misleading to curtail reconstructions at some point per se, or to splice data, but we believe that both of these procedures should have been made plain -- ideally in the figure but certainly clearly described in either the caption or the text.

So the complaint is not that there's anything wrong with the results, but that they should have said more about the procedure by which they were obtained. The Heritage Foundation, on the other hand, says:

What they were trying to hide was the discrepancy between actual temperature readings and the temperatures suggested by tree ring data. They have relied on tree ring data to show that the earth was cooler in the past. If the tree ring data is not reliable (as the discrepancy in recent years would suggest), then maybe the earth was actually hotter in the past than these researchers would have us believe -- and perhaps the hot temperatures of recent years do not represent unprecedented global warming but just natural variation in climate.

So the Heritage Foundation's complaint is that the tree-ring reconstructions might be just plain wrong, and that the CRU's material obscures that and therefore suggests more confidence in AGW than is justified by the data. Note first of all that none of that is supported by the material from the investigation report. Secondly, it happens that the investigation report does comment on the issue of whether recent divergence between tree-ring data and temperature shows what the Heritage Foundation suggest it shows. Here's what the report says:

21. We do not find that the way that data derived from tree rings is described and presented in IPCC AR4 and shown in its Figure 6.10 is misleading. In particular, on the question of the composition of temperature reconstructions, we found no evidence of exclusion of other published temperature reconstructions that would show a very different picture. The general discussion of sources of uncertainty in the text is extensive, including reference to divergence. In this respect it represented a significant advance on the IPCC Third Assessment Report (TAR.)

22. On the allegation that the phenomenon of "divergence" may not have been properly taken into account when expressing the uncertainty associated with reconstructions, we are satisfied that it is not hidden and that the subject is openly and extensively discussed in the literature, including CRU papers.

In other words: when you look at the bit of the investigation report that's concerned with the exact issue the Heritage Foundation is complaining about here, it turns out that they think that complaint is invalid. But of course that doesn't fit the Heritage Foundation's agenda, so instead they quote a different portion of the report and pretend it says what they want it to say.

Sounds reasonable (unless there's some other very solid evidence that the trees really are linked to temperature as the model says, and just nobody talks about it because everyone who knows thinks everyone else is too stupid to bother with).

Now let’s see if the media can report the result in a way that is not itself misleading.

It's the media, their "core competency" is writing to attract eyeballs for advertisers. I'd take that to mean they'll be (accidentally, even) misleading by default, and since they don't know more than the rest of us they won't know to correct for that.