I hope he does not resign. Regardless of your opinion of Rob Ford, it would be an outrage to have him removed from office based on unproved allegations. As far as pursuing litigation against the Toronto Star, there is little to pursue. If you read the articles they are very careful to say that the video 'appears' to be Rob Ford, not that it is Rob Ford. Every published attack on Ford has been vetted by the corporate legal team to minimize their exposure. If Ford is out of office for any other reason than a public election, then you might as well let the Star appoint the next mayor. I am not a big Rob Ford fan, but this endless harassment and persecution by the Star goes too far.
It isn't 'removed from office' if he decides to resign. The worst you could say is 'pressured to resign', there's really no way to remove a Mayor, not even to force him to resign.
You're quite right in your description of the careful way the Star said what it knew, and made sure it did not say what it had no evidence for. It's basic Journalism 101, and you must have encountered many examples of the same thing before. Chief Executives—like For—resign when they cannot get enough supporting votes to get anything they propose actually done. That's what a non-confidence vote tells them, and why it triggers a federal or provincial election. But we began to see Rob didn't have much in the way of concrete proposals or plans, and he's just one voice at Council anyway, so others have stepped into and filled his vaccuum long ago.
He can stick around as long as he can put up with the media mess and attention, and whatever distrust he's sensitive enough to notice coming his way. Council's used to doing withou much of a Mayor, and no longer expects much. But what would be nice for all of us, including Rob, would be for him to continue the start he made with first two sentence denial he later amended. If the Star can lawyer up a detailed account of what its reporters think they saw, why can't a rich and resourceful Mayor simply lawyer up a line-by line denial of it?
'I do not smoke crack [But did you never smoke it?], I am not addicted to crack [What about other drugs, like alcohol? Ever have been? Only asked because you brought it up Rob.], the video does not exist [Is that because it has been bought, or grabbed and then destroyed?]' was a week late and a pound short when it landed, with as many logic holes as a Swiss cheese. The perception that it was the best he could come up with or that his lawyers could permit is doing nothing to calm the waters.