From MSNBC:

President Hosni Mubarak addressed an expectant Egypt on Thursday, saying that he had delegated his powers to the vice president and saying those who died during Egypt's unrest did not die in vain.

Saying he was addressing Egypt's youth and people in Tahrir Square and the nation, he said he believed in the honesty of the demands of the protesters and their intentions.

"I am addressing from the heart," he said. "The blood of the martyrs and injured will not go in vain ... My heart aches for your heartache."

Earlier, two sources told NBC News that Mubarak was expected to step down, losing his 30-year grip on power after 17 days of dramatic mass uprisings across the nation.

That clearly did NOT happen. We'll have the video up ASAP.

UPDATE: The crowd at Tahrir is clearly angry and dismayed:

The speech was immediately derided by protesters in Cairo's Tahrir Square. Watching on a giant TV, protesters booed and waved their shoes over their heads at his image in a sign of contempt. "Go, go, go! We are not leaving until he leaves," they chanted. One man screamed, "He doesn't want to say it, he doesn't want to say it."

UPDATE II: More on the crowd from CNN:

Thousands of people waved Egyptian flags and roared, "Get out! Get out!" in Cairo's Tahrir Square late Thursday as it became clear during Hosni Mubarak's address that the longtime president was not stepping down as reported.

"I don't know if he has a brain or if his brain is elsewhere," one protester in the square said, expressing frustration that Mubarak appeared to be saying that he enjoyed support from most Egyptians.

Watching Mubarak's Thursday-night address on what appeared to be a sheet hoisted over their heads in the square, the crowd became angry as the president made promises to amend the constitution. They broke into cries of, "Illegitimate!" and "Mubarak the coward must stand down" upon learning that Mubarak was transferring some authority to his vice president rather than resigning.

After the speech, a group of demonstrators began walking down a road that led to the state television offices, though their ultimate destination wasn't immediately clear. The state-run media outlets have been seen as a mouthpiece for the Mubarak administration.

Other protesters threatened to march to the presidential palace, which would surely ratchet up the tension in the capital. The palace is not near the square and is dotted with military checkpoints.