Below is the cut-and-paste from your link. It is now safe to eat but try not to eat too much or else your will be a fat over weight chicken!
UPDATE, 10/4/10: The story has been amended to reflect that although mass produced chicken nuggets at large may contain mechanically separated chicken, McDonald's famous McNuggets no longer do contain "mechanically separated poultry as defined by the federal government. The USDA now requires foods with mechanically separated poultry to be labeled as containing "mechanically separated chicken or turkey" in their ingredients lists.
Additionally, although "mechanically separated meat" may apply to turkey, chicken and pork, due to concerns over BSE, the federal government has held since 2004 that mechanically separated beef "is considered inedible and is prohibited for use as human food."
Mechanically separated meat is present in hot dogs, cold cuts/sausages (salami, etc). Except for beef due to BSE/mad cow disease, it is not unsafe to eat, even though it is considered lower "grade" than cuts of meat. Hey, I consider nuggets nutritionally superior to these "premium" sausages and prime steak due to the obscene amount of fat in the latter items.
Given McDonalds' vast experience with mass food production methodology and sensitivity to PR issues, I trust them better at cooking their meat products thoroughly than the chefs at independent diners, chain restaurants or even school kitchens.
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