Just saw this on the blog of Italian Vaticanista Andrea Tornelli. The priests are gathered for the 12th annual meeting of clergy (presumably from across Brazi), where Cardinal Claudio Hummes, erstwhile Archbishop of Saõ Paulo and now prefect of the Congregation for the Clergy, is also participating. According to S. Tornielli, the request was made officially to the Holy Father through the same dicastery. According to him the petition suggests that the the discipline of celibacy be retained for those in religious orders with vows of chastity, but not for ordinary parish clergy.
As S. Tornielli notes, every once in a while one hears of some group or the other mentioning the possibility of the lifting of the discipline of celibacy in the Latin Rite. The Synod on the Eucharist in 2005 decided not to deal with this subject. Like S. Tornielle, I don't have any problem in principle with married men being priests (in fact, I know married men who are Roman Catholic priests! One of them blogs and is a great asset to the priesthood and the Church!). In fact, a wider presence of married men in the presbyterate could be salutary for many reasons, even as it brought a host of other problems (what does one do when Father gets a divorce?). However, I will admit to being suspicious of groups who make celibacy a kind of platform issue (it's often accompanied by stuff that is a lot more problematic). As S. Tornielli asks, "è davvero il celibato dei preti il problema della Chiesa di oggi? E' aprendo ai preti sposati che si risolve il problema del calo delle vocazioni?" ("Is the celibacy of priests really the [main] problem of today's Church? And would opening up to married priest be what resolves the problem of the decline in vocations?")