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Google will soon remove support for it completely in Jul and Aug timeframe: http://developer.chrome.com/extensions/manifestVersion.html
I was trying to make the relevant changes by updating manifest.json, moving all scripts to external .js files, and moving inline calls (such as onload="init()") as a Listener.
However, I had challenges with the flatter dependency as that is an inline script dynamically injected. The new Content Security Policies do not seem to support inline scripts. I will continue to explore but if you are already working on manifest version 2 then I can stand by (or try to help).