Dominator PS3's tell-all YouTube video has been taken down, allegedly because he received death threats. But he's put up a follow-up video, which you can watch here.
NASA's Emily Lakdawalla, who was responsible for the photoshopping, explained it over at Planetary.org:
Cassini takes color pictures by snapping three sequential photos through red, green, and blue filters. In the time that separated the three frames, Dione moved, so if I did a simple color composite I would be able to make Titan look right, but not Dione; or Dione look right, but not Titan. So I aligned Dione, cut it out, and then aligned Titan, and then had to account for the missing bits of shadow where the bits of Dione had been in two of the three channels.
She explains the process further here, showing how some other images of Saturn and its moons have been photoshopped — but she didn't post any raw images of the Dione/Titan image that caused the controversy. So at least some conspiracy theorists were not appeased, demanding to see the raw images