1. Enthusiasm. People tend to see electorate through a one-dimensional lens, in which a fixed number of voters are trying to decide between two or more candidates. But that's not really how politics works, especially in primaries. Rather, the playing field is (at least) two-dimensional: people are not merely trying to decide whom to vote for, but also whether to vote at all. Because of the reach of her brand, Palin has the ability to engage the sorts of voters who might ordinarily stay at home. In the general election, that will include some voters who turn out to vote against her -- but that's less of a concern in the primaries.
2. 2010. Next November will probably be a happy night for Republicans and my guess the emergent c.w. will be that it occurred because of, rather than in spite of, the Republicans eschewing moderation in favor of (re)building their base. In reality, that case is likely to be highly circumstantial at best -- it might be that Republicans gain, I don't know, 26 House seats, but would have gained 33 if they'd run more to the center. But that won't prevent people from leaping to conclusions, and I expect those conclusions to tend to play favorably for Palin.
3. The other candidates are flawed. Mitt Romney has limited appeal to the evangelical base and is an unapologetically establishment candidate in a primary where anti-establishment sentiments are liable to prevail. Newt Gingirch has never been especially popular, has never won an election for any office higher than the U.S. House, and lost some street cred among conservative activists with his failure to endorse Doug Hoffman. Tim Pawlenty is unpopular in his home state, barely registering as a national candidate, and appears to suffer from Romney's flaw of running away from his record. Mike Huckabee, I think, is underrated, but the Club for Growth crowd will never like him, and his hokeyness could grow a little tiresome in the face of a year-long primary campaign.
4. The other candidates might not run. Although I doubt that Palin can clear the conservative half of the GOP field, someone like a Huckabee could very well decide to go ahead and let Palin run her course, re-entering the field in a 2016 climate that is liable to be more favorable to Republicans.
5. The media will be rooting for her. She's good for the bottom line; off the top of my head, I'd guess that an Obama versus Palin election would generate at least 20-30 percent higher ratings than Obama against Mystery Republican X. Also, some players in the liberal media may be rooting for her because they'll assume that a Palin win in the primary could give Obama an easier path toward re-election.
6. She's tough to campaign against. Why? Because any perceived or real slight against Palin is taken by her supporters as an example of sexism, elitism, or media bias; just wait until Huckabee or Romney makes their first impolitic comment about Palin in a debate or an interview and watch the sparks fly.
7. There are virtually no moderates left in the Republican base. Although, there may be a significant number of independents voting in some of the primary states, which makes things marginally harder for Palin than in election where many independents were sucked into the Democratic primaries.
8. Attempts by the Republican Establishment to neuter her may backfire. This is a corollary of #6 above. If the Establishment, owing to electability concerns or whatever else, tries to put hurdles in her way by re-structuring the primary or delegate allocation process, it may only play into the victimization complex of Palin and her supporters.
9. Parties tend to nominate more extreme candidates in elections against incumbents. This tendency is not all that robust, but you can find plenty of examples of parties nominating extremely liberal/conservative candidates in elections against incumbents, such as George McGovern, Ronald Reagan, Walter Mondale, and Barry Goldwater. There are some counter-examples too -- Bill Clinton, arguably, and someone like Thomas Dewey if you want to go back that far -- but on balance, parties seem to nominate more extremist candidates in elections against incumbents than in open seat contests.
10. She gets new media; new media gets her. Conservative blogs love Palin, as do most of the shock jocks; they matter a great deal and may help Palin to overcome what I expect will prove to be a relatively shoddy traditional infrastructure.
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Now then, do I think Palin is the favorite to win the Republican primary? Not necessarily. She's certainly not the majority favorite and perhaps not the plurality favorite, depending on who runs. And you could fairly easily come up with a set of ten bullet points to argue against Palin's chances. But I think she'll run, and I think it would be a mistake to discount her chances too significantly given the makeup and mood of the Republican primary electorate.