According to a Time Magazine story, it's because she realized after a year or so that the public lashing she gave him stemmed from the fact that she herself felt betrayed, rather than a fraud he perpetrated on the American public. She felt that he didn't really deserved to be whipped so publicly.

You can read the whole article about the situation here:
http://www.time.com/time/arts/article/0,8599,1897924,00.html

Here is a pertinent quote though:
"And now, apparently, it's over. In Oprah's phone call to Frey last year, she told him that she'd been meditating and suddenly realized that part of her reaction to his mendacity stemmed from her personally feeling duped and betrayed. She said, in what might be a first for any entertainment mogul, "I feel I owe you an apology.""
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