Yes, he embellished - nay, he lied about several of his experiences. Like most liars, he was found out. Did is affect is credibility? Absolutely. Could his credibility be restored? I think it's possible.
Please know I don't condone what Brian Williams did. But NBC overreacted -- yes, he deserved to be on unpaid leave for as long as he was. But, in my mind, Brian Williams reads the news. For the most part, he doesn't report it. There's a difference. Doesn't give him the right to lie about his experiences, but I'm not surprised. And to me, it doesn't reflect on the rest of the news staff at NBC.
When I was a newspaper reporter, accuracy was important -- particularly for reporters. About everything. We turned our noses up at television news -- and we used the term "news" lightly. Unfortunately it's the case for both television and newspaper journalism today -- but that's a topic for another blog post.