People Magazine reported that Hudgens had a history of emailing her provocative photos, having once sent them to Nickelodeon’s Drake Bell.  Jill Fritzo, Bell’s representative, apparently denies that her client had ever received the photos.

Hudgens acknowledged the photos in a statement, saying she was "embarrassed over the situation and regret(s) having ever taken these photos.” 

One of Hudgens’ reps said the initial picture "was taken privately. It is a personal matter and it is unfortunate that this has become public." 

At the time of the controversy, Disney was in negotiations with the core cast of High School Musical, and given the squeaky clean image of the network, we wondered whether Hudgens had seen her last days in the land of Mickey.

It’s a bold (and new) step for Disney, in many ways.  The Hudgens photo scandal placed her in the public’s eye alongside other Hollywood vixens like Paris, Lindsay, and Kim Kardashian.  But in choosing to renew Hudgens HSM deal – and for more money – Disney clearly believes the fans (and more importantly, the parents of those fans) have been unaffected by the situation.