It seems as though speculation about Gilbert Arenas' potential trade is now fact.
According to FS Magic, The Orlando Magic have indeed had talks about trading for Arenas:
Otis Smith said the talks with Washington about Arenas are at an "8 out of 10" in terms of aggressiveness. But "nothing is imminent". Right.
FSMagic
FSMagic
In addition, according to Michael Lee of the Washington Post (via Brian Schmitz of the Orlando Sentinel), the Orlando GM believes Arenas could be due for a career comeback:
@MagicInsider is reporting that Otis Smith is pursuing Gilbert Arenas, among others; called him "a sleeping giant" in private conversations
Michael Lee
MrMichaelLee
That sounds like someone who is in aggressive talks to get Arenas.
It remains to be seen the exact package of players the Wizards would get in return (right now speculation is that it could include Vince Carter or Rashard Lewis), but regardless, it certainly looks like they are about to part ways with perhaps their best player not named John Wall.