From the New York Times:

" Updated: 4 p.m.Senator Larry Craig has just issued a statement saying that he will stay in the Senate through his term, reversing his earlier willingness to resign in the wake of an airport-restroom scandal."
Here's his statement:
"I am extremely disappointed with the ruling issued today. I am innocent of the charges against me. I continue to work with my legal team to explore my additional legal options.
"I will continue to serve Idaho in the United States Senate, and there are several reasons for that. As I continued to work for Idaho over the past three weeks here in the Senate, I have seen that it is possible for me to work here effectively.
"Over the course of my three terms in the Senate and five terms in the House, I have accumulated seniority and important committee assignments that are valuable to Idaho, not the least of which are my seats on the Appropriations Committee, the Energy and Natural Resources Committee and the Veterans' Affairs Committee. A replacement would be highly unlikely to obtain these posts.
"In addition, I will continue my effort to clear my name in the Senate Ethics Committee - something that is not possible if I am not serving in the Senate.
"When my term has expired, I will retire and not seek reelection. I hope this provides the certainty Idaho needs and deserves."