It's going to be an interesting Presidential campaign, no matter what. All plausible candidates have glaring flaws in them.
Let's see how well I can do with predicting the possible outcomes of the election this far in advance.
(If you have not read my Goverment Myths series, explaining how I see party politics in the US, the following will make less sense. If you are incapable of rising above your own political preferences to take a clear-headed, cynical view of the actual political situation regardless of your personal allegiances, the following will make no sense to you.)
Broad Overview
The current polls match up both plausible contests at what might as well be 50-50. I believe this accurately describes the present. The rush some people are in to declare the Presidential election over and crown Obama or the Democratic candidate in general is sheer foolishness; how the delusion that one can predict politics months in advance has survived the primaries beats me.
I believe this is a side-effect of biased media coverage; no, not the "usual" bias charges, but the bias caused by the fact that the only news is coming from the Democratic contest, since the Republican contest is over. This makes it look like the Democrats are dominating the political discourse, but this is an artefact of the reporting; it does not accurately reflect the political landscape.
The field is wide open. Republicans may carry some baggage from the last few years, but the Democrats have almost completely failed to capitalize on it themselves, as demonstrated by the low regard for the Democratic Congress the public has. If they got their act together and started actually accomplishing things, I think this would greatly strengthen the Democratic Presidential cause. It seems to me the Democrats have confused "discontent with the Republicans" as "agreement with the loudest parts of the Democratic party", confusion the "loudest parts of the party" have been all to happy to compound. I think they've failed to take advantage of some major weaknesses in the Republican coalition, perhaps the biggest one of which is the discontent of the financial conservatives. If the Democrats had followed through on their promises w.r.t. earmarks, I think they'd be in a much better position. (And if the Republicans hadn't abandoned all pretense of fiscal responsibility, I think they'd still have a Congressional majority. Even weak pretense might have saved their majority; they didn't lose it by much.)
John McCain is already making motions towards positioning himself here. If he firmly takes the fiscal conservatives, that's going to be a big plus on his side. Unfortunately for the Democratic candidates, I don't think they can combine fiscal responsibility rhetoric with a promise of universal healthcare; the paradox between claiming that Bush has brought this country to financial ruin with unwise tax cuts and excessive spending, then mere minutes late promising gigantic new entitlements is too large. They're trying this, but I expect they're going to find out this isn't working, and they're going to have to pick one or the other. In the nomination process, they're going to have to pick Universal Healthcare, but either could drop it in favor of fiscal responsibility in the general. Both Republicans and Democrats have gorged on pork lately, but the Democratic platform still has a greater fundamental weakness in this area, in their need to guarantee social justice with massive spending.
Barack Obama
Obama may be the current golden child, but Obama has several major problems. First, while his smooth tongue can help him in the general, it's also causing him problems in the long term. People are so smitten with him that they can't clearly see his weaknesses. That's good for the voters, but that's bad for the party and the campaign; one must clearly see one's weaknesses in order to address them.
Secondly, the Obama of the past couple of months is unelectable. He has managed to annoy Pakistan, Mexico, and Canada, before being nominated. (I've seen both sides of the Canada-NAFTA argument, and so far, if you apply the same standards Democrats routinely apply to accusations against Bush, Obama is in the wrong. I demand consistent standards.) His foreign policy is somewhat incoherent so far; the way in which he annoyed Pakistan was by declaring that he would be more unilateral than Bush has ever been and simply attack a terrorist site on their soil with no permission if he had to. I doubt he meant it, but he still said it. Rationally speaking, any claim he may make to being able to "restore relations with our allies" must be considered a joke in light of the evidence so far; he's already negative in that column. Clinton can't nail him on this as she's indulged in it herself, but McCain will hammer on this point if he has half a clue.
The charge of lack of experience will stick, too; broadly speaking I consider the experience issue much less important than most people, because I don't think there is any way to prepare for being the President, but nonetheless, it will stick. He has hardly any relevant experience, and what executive experience he has was not characterized by wild success.
The good news for Obama is that none of the disadvantages are permanent, except for perhaps the experience issue which he can still skirt around if he runs a strong enough campaign such that he can choose the focus of the news cycles. I think the fast news cycle can play to his advantage, if he takes advantage of it to refine his message, work on his policy initiatives, and make the successful adjustment from running for the Democratic nomination (where a very liberal person can win) to the general election (where a very liberal person probably can't). The bloom will come off the rose long before November, hopefully negating the blinding aura surrounding him before it's too late for his campaign to acquire perspective. I recall candidates from previous elections making dumb policy declarations early on in the process, so that's hardly fatal.
The most likely way the bloom will come off the rose is that it will become clear that for all his rhetoric, he is just another politician. He's perfectly willing to say one thing to one group and another thing to another group. He's perfectly willing to say things he doesn't believe or doesn't intend, if that's what he believes he needs to do politically. A clear-headed look at the campaign he's already run makes that reasonably obvious. Personally, I don't ding him for that; it is indeed part of being a politician, and that happens not because the politician is bad but because we-the-electorate demand it, but it's a problem that it conflicts so hard with the image he's created.
I would predict that if he tries to just talk his way through with Change and Hope and hoping for change and changing for hope, he's going to get slaughtered in the electoral college. Obama's chances would depend on how well he manages to transition from his current highly non-traditional campaign to a more conventionally-strong campaign. He can and probably should keep playing the Hope & Change themes, but he's going to need to add some more competent backing.
A successful Obama campaign will probably manifest as a drop against McCain over the early parts of the general campaign, followed by some message re-organization, followed by wild success as he finds his footing. I expect that one way or another, he'll have an extreme electoral college result, either carrying most states or losing most states.
Hillary Clinton
Much like Obama, Hillary's biggest problem is also her biggest asset. For her, it's the Clinton on the end of her name. I still truly believe that no matter what the polls say the day before the general election, a lot of the center will step into that polling booth and ask themselves, do I really want to go "Bush-Clinton-Bush-Clinton"? I think a lot of people who might otherwise vote for her will think twice enough to not vote at all, or possibly vote a third party.
She's also got some experience issues, but they are not as bad as Obama's. As I said, I think that issue is overstated by most people, and she meets my bar on that front.
Other than the issue of voting for another Clinton, I actually think she is more broadly electable than Obama. She hasn't got any tricky transitions to execute; we already know who she is, we already know she's a Machiavellian candidate (though it has been amusing to see the Democrats finally realize that the Clintons are Machiavellian, an outstanding example of the ability of partisan politics to blind you to the obvious about Your Side(TM)) and for all her negatives that people talk about, she is still polling even with McCain in the general. I think if those negatives were as negative as people thought, that would not be true, excepting the "B-C-B-C" problem. Her position and campaign in the primaries is closer to something generally electable.
I don't feel informed enough to judge whether a nasty convention would do grave harm to the Democrats. I still think that we are ripe for a massive re-organization of our political landscape, in a way that may include a new third party displacing one of our current parties; both parties have become too ideological at the cost of pragmatic considerations of how to get votes, which may be cynical but is at the core of a successful coalition in American politics. Discounting what that would do, I do think that if the superdelegates choose Clinton, that is a reasonable response to the current electoral landscape. Where I predict Obama will either shine or crash, I think a Clinton victory would be a narrow, hard-fought victory with a bare majority of electoral college votes. But that's all you need, and I'd judge it as a somewhat more reliable outcome. (The Clintons are good at that sort of thing.) It is reasonable to conclude that Clinton is the better candidate. It is not the only possible conclusion, but it is a reasonable one.
John McCain
McCain has had it easy these past couple of weeks. Being the presumptive nominee, he can freely take cracks at the Democratic nominees at will. Or choose to stay silent, knowing the two Democrats can't afford much energy attacking him. Obviously, this advantage will end soon.
His biggest advantage is that he is broadly Centrist. His nomination probably indicates the waning of the power of the hard right in the party. Like I said earlier, if you knew nothing about this election beyond "Centrist Republican" vs. "Liberal Democrat", a rational/cynical person would choose the Centrist in a landslide. McCain's nomination may indicate that the Republicans may be going back to a cynical attempt to build a coalition that has the votes and decreasing their hard ideology. This would bode well for them. The downside is that he will probably fail to fire up the base, which could cause voter turnout issues. This is part of why I give the nod to Clinton in a 50-50 scenario; I think that even being Hillary Clinton, she'll be able to pull out more voters.
I think his biggest problem is one that I haven't seen much discussion of, but I expect I will: His age. He's 71 right now. He'll be 72 before taking office. 76 at the end of his first term, 80 (!) by the end of a theoretical second term. Anybody with eyes can see how much the Presidency ages a man; it is not, nor can it be, an easy job. I expect few in the media to call this out, but McCain's VP choice will be much more important than it will be for either Clinton or Obama, because the odds of the VP getting upgraded to P are much greater.
Independent of the political issues, I am very skeptical that McCain can serve even one full term; even if he doesn't have a heart attack and outright die, there are plenty of other health issues that could arise that would require him to step down. There is also a real possibility this could turn into a figurehead presidency, where McCain is still the guy who appears to make speeches but has been forced to turn over all the decision making to other people. It would not be the first time that has happened, but I expect that in the modern era, it would inevitably be discovered, and it would do grave damage to the Administration as a result. Bush was mocked for being "the Decider", but Bush had the better sense of what people want from a President than those mocking this did. Everybody wants to maintain the fiction that the President is actually in charge of everything, even as that is plainly implausible in the modern era. Unfortunately, unlike most of the weaknesses I've discussed up to this point, this mostly can not be mitigated. Obviously, he's not going to get younger. The only way to mitigate this is to choose a VP that people still like, but that's not much mitigation.
The McCain victory pattern I'd predict depends on the Democratic candidate; to win, he'll either stomp Obama, or edge out Clinton.
Conclusion
Each candidate has major flaws. The campaign will come down to who can mitigate those flaws best.
I think McCain broadly has the "flaw advantage" right now, but his biggest flaw is virtually immutable, where all Clinton and Obama flaws can be mitigated for the general election if they execute a competent campaign. The increased number of news cycles probably gives the Democratic candidates "more time" to run to the center than they've ever had in any previous election.
It's not over. It hasn't even started.
(What's my preference? Well, I'll probably be voting McCain, without much glee, but without much shame. However, based on the past 50 years of history, my favorite governments are Democratic President with Republican Congress, even though I wouldn't vote for the Democrat in question. And I don't consider a Republican Congress half as impossible as most current pundits do; again, it's not possible to predict that far in advance.)