More long useless thoughts here..
From what's been going around the Net, Kat was fired due to conflicts over upcoming storylines with the RTC. Most likely, this means that they wanted her to turn on Jerry, she refused, so they fired her. I hate to say it, but she is extremely expendable. The only real asset that she brought was that she was hands down the most willing of the WWF women to strip. She certainly couldn't wrestle, couldn't cut a particularly convincing promo, and couldn't really act either. The WWF can hire a stripper anywhere, and from all reports Victoria (I forget her real name...Marie Lynn maybe) has been impressing people in MCW/OVW.
I strongly suspect that the WWF will make Jerry a very sweet offer to get him to return, possibly as early as Monday. If not, there's any number of people that they can bring in to do colour (Cyrus being the most notable/likely) and Michael Hayes is perfectly adequate to fill in until such a person comes in.
I'd like to say that this is shocking and will have deep ramifications, but it won't. The only possible drawback is that the WWF will sever it's ties in Memphis (fairly likely since they can't draw for crap there) and concentrate all it's efforts on OVW and UPW (in California). Lawler walked out on a contract meaning that he can't go to Nitro (unless he pulls a Sable and shows up in the crowd, which would burn any chance of his returning) and WCW is clearly not going to be bringing in females anytime soon. They're both pretty much screwed, but like I said, I'd put the over/under on Lawler's return being 2 weeks.