The 'reports' have definitely been fluctuating.
First, to the best of my knowledge, the number of airplanes being discussed has always hovered around 50 frames. OTOH, there has been no official break-down of this number between firm/option/leased, so different numbers have been reported in different sources. The last I heard, the majority of the aircraft will be leased, at least to begin with.
As already mentioned, VirginUS was reported to be 'only talking to Airbus' about a month ago. However, lately this has been denied, and Virgin has stated that both Boeing and Airbus are still in the running. These reports, whether intentionally or not, have coincided with stronger and more reliable rumors that Virgin Atlantic is very close to a 777 order (initially -300ERs, but possibly also -200ERs). Whether these orders will actually be tied together remains to be seen.
IMO, the narrowbody order will come down to timing. IIRC, VirginUS wants to start operations fairly quickly, and would therefore need aircraft ASAP. According to Boeing, 95% of 2005 production has been sold out. Apparently, this was the primary (though, of course, certainly not the only) reason Jetstar went with the A320. Airbus reportedly still has some empy A320 production slots for mid-2005, mostly reserved to leasors. This makes me think the A320 will get this order, regardless of the VS
widebody decision (which at the end of the day, I believe Airbus will still win).
Honor the warriors, not the war.