Maybe I'm just a usage stickler, but there's no censorship on display in the ESRB's rating of Manhunt 2 as AO. No one's telling Take Two that they have to edit the game or take out any content. They could even make it more violent if they wanted to, since there's no particular ceiling on violence in an AO game; it's not like it can be rated anything worse. No one's telling retailers that they can't stock the title, either. Adherence to the ESRB's rating system on the part of developers, publishers, and retailers is entirely voluntary; most of the cogs in the wheel go along with the system simply because they realize that the alternative, government oversight of the games industry, would be even worse. (Would you guys prefer to have Take-Two be fined by the FCC for indecency for each copy of the game sold?)
I don't actually care all that much about Manhunt 2, but the cries of "censorship! censorship!" do bug me. There's a lot of real censorship that goes on in this country (have you seen any photos of caskets coming back from Iraq lately?), and elsewhere, and using the term in regards to this kerfuffle is pretty much crying wolf. Save it for when it matters. You can argue that the economic ramifications of the AO rating equate to a kind of de facto censorship, but still, if Take-Two wants to keep the AO rating and sell Manhunt 2 on their website, no one's going to stop them. When you're talking about "censorship", an AO rating is about the same as me saying "Wow, that game's really violent!" Granted, the ESRB rating will have more of an impact on Take-Two's finances, but neither statement is going to prevent them from making the game as violent as they want it to be.
Note that I wrote this before Sony and Nintendo said that they wouldn't license an AO-rated game. That's another can of worms.