Was Pope Benedict misquoted on condoms in Africa? Maybe not.
Damian Thompson proposes that he was:

The Vatican has just published its transcript of the Pope's comments about AIDS in Africa and it turns out he said that condoms risk making the problem worse.

Maybe it doesn't make much difference, but the English-speaking press had the Pope saying that it "even aggravates the problems". Not quite the same resonance; not as headline-worthy.

The CNS blog meanwhile reports on a clarification issued by Vatican spokesman Fr. Lombardi, this after CNS's own John Thavis claimed Pope Benedict to have said the distribution of condoms "only increases the problem of AIDS."
... now, this is not the end of the story. Here's why:
The Vatican press office has royally flubbed its handling of these situations before.
I remember breathing a sigh of relief last year during the pope's in-flight interview on his way to the United States that nothing went wrong, because things did go wrong in 2003 during the pope's in-flight interview on his way to Brazil. The Vatican press office's solution was to issue a toned-down version of the pope's remarks about Mexican lawmakers the next day.
The Vatican press office might have decided to apply that same solution today. Especially since, from what I've seen, Fr. Lombardi has not specifically claimed that the mainstream media's reporting of the pope's words was in fact erroneous.
One thing we can be sure about: because the Vatican has denied claims made by the mainstream media about what the pope actually said, you can bet that the mainstream media sources are going to go back to their audio/video recordings of the interview and double-check what he said.
So be prepared - possibly - for an audio or video clip of the Pope, well, misspeaking.
Then again, this could just be media bias. Time will tell. Stay tuned. And be aware of the history, too.
update: Ruth Gledhill agrees about the comments (though I don't agree with her about condoms).
update 2: sure enough.... "It looks like some idiot in the Vatican press office tampered with the Pope's quotes. Time for sackings"