I've written extensive commentary about how I think Palin's chances are in fact pretty decent. I'd probably call her the "favorite", although "favorite" in this context might mean having a 25-30 percent chance of winning. From my list of ten bullet points, this one stands out as the most important:
8. Attempts by the Republican Establishment to neuter her may backfire. This is a corollary of #6 ["She's tough to campaign against"] 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.2010/12 is shaping up to be an anti-Establishment cycle. The Republican Establishment is not popular, to a large extent even within their own party, and certainly not among "conservatives" more broadly, only 55 percent of whom have a favorable image of the G.O.P.
Palin has some obvious flaws as a candidate. But she's the best equipped to bridge the divide between the Tea Party and the Republican Party. In some ways, indeed, the "message" that she unveiled in 2008: a mish-mash of populism, everywomanism, and paranoia -- coupled with a light touch on policy specifics -- has proven to be highly prescient in terms of everything that has come thereafter. And most of the other candidates have flaws that are at least as significant: Romney has his Mormonism, his flip-flops, and his MassCare; Huckabee has Maurice Clemmons and is despised by the establishment every bit as much as Palin, and Tim Pawlenty has become the dweeb trying to keep up with the Cool Kids -- we live in a branded world, and in a branded world, the inability to differentiate oneself is death. John Thune comes out looking pretty good, I guess, but he's also the least exposed so that could change.
But back to the point I made in November -- there's going to come a time, probably in July 2011 or so, where the knives are really drawn on Palin and Republican pundits, strategists and candidates start saying in public some of the things they've been thinking in private. And that in all likelihood will play very well for her. Although the Establishment's concerns about Palin's viability as a general election candidate are well grounded, mostly they're just terrified of her because she doesn't need them.