(Map from CIA - The World Factbook)
The Daily Dish had a reader make the following statement: "...It claimed that there are a majority of ethnic Russians in South Ossetia. In fact, the majority are Ossetians, a small Iranic-Language speaking group." (original here)
I have no special knowledge of the linguistic diaspora in this region, so I did a little quick research.
- According to The CIA World Factbook, Georgia's overall population is 4,630,841.
- According to its Wikipedia page, there were about "45,000 ethnic Ossetians and 17,500 ethnic Georgians in South Ossetia in 2007" (let's say about 62,000 altogether).
- According to Ethnologue there is a language called Osetin with about 100,000 speakers in Georgia (figure from 2001).
- Osetin's typological classification is Indo-European, Indo-Iranian, Iranian, Eastern, Northeastern.
The answer, then, is yes, Ossetians speak Osetin.
UPDATE (8/25/2008): Bill Poser over at Language Log has a nice post discussing the "linguistic aspects of the situation in Georgia" here.