The Packers have relented. ESPN has the details:

 Team president Mark Murphy said in a statement Sunday that the team has a specific plan with Favre in camp that it won't reveal until Monday, but sources told ESPN's Wendi Nix that coach Mike McCarthy will announce he's holding an open competition for the starting quarterback position.

Jason Wilde has more on the extremely weird situation: 

"We are no longer negotiating a marketing deal. Those talks are over," a Packers source said Sunday afternoon. "Once he boards that plane, his intentions are clear."