Barack Obama is fighting a losing battle for 2008, and a winning battle for 2012. Hillary Clinton is en route to winning by a massive margin the Democratic nomination, but her viability in the national election is dire. If she does not win the White House, and few of the more objective analysts (like myself, of course), Barack Obama has both the nomination and the presidency in 2012.
Presently, Hillary is enjoying a gender novelty matter. Take away gender, which will not be an issue by 2012 either way, and things get much closer.
Meanwhile, Obama, safely serving again as an Illinois senator (something Illinoisans are not sure he's doing well), he'll remain high in the national eye, raising money, and paying his dues.
Poll Averages - Democrats