People for the Ethical Treatment of Animals (PETA) has dropped its $350,000 lawsuit against talk-show hostess Rosie O'Donnell. The animal-rights group filed a defamation suit last year after O'Donnell joked on-air that the Gap's leather pants were approved by PETA. But on Thursday's show, O'Donnell finally extracted her foot from her mouth, telling her viewers that "PETA feels no one needs to wear any leather apparel at all."