I personally don't like Hillary, but when you consider the facts of the general election she actually has a better chance of winning. This election, like the last two, will come down to a handful of swing states. Obama's problem is that he has failed to get traction with any of the constituencies that decide those contests.
Beginning in March with the Wright fiasco, then Bitter Gate, and even the Bill Ayers issue, the halo around Obama has been more or less obliterated. He has also been shown to have major difficulties attracting Hispanic, Jewish, elderly, and blue collar white voters. Without these demos he stands little chance of winning the all important swing states like Florida, Ohio, New Mexico, Iowa and even Pennsylvania and Michigan.
Obama's major support base right now are the liberal whites, the college crowd, and the Black community; but all three groups tend to vote democrat regardless of who's running. Working class whites aren't as partisan though. Democrats traditionally lose elections when they lose the working class white vote by more than 10 points. Kerry lost that demo by 17 points. With the recent Jeremiah Wright scandal and his own "bitter" comments I would be surprised if Obama manages to do any better with that crowd. In fact, I would guess he will do worse. The economy will pull some of those people in, but I'm afraid it won't be enough to keep the loss margin within 10 points.