It was not supposed to happen this way. Hillary was supposed to have it sewn up by now. No one predicted that the Republican field would thin out so quickly. If anything, this election proves that the mainstream media pundits are no more likely to be right than any other moderately well informed observer. Recent news here
So now what? For the Democrats, I can see three possible outcomes. Scenario 1: Hillary and the Clinton machine change the rule in the middle of the game (by seating the Florida delegation for example) and ending up stealing the nomination. This so upsets Obama supporters, and independents at large, that Hillary falls significantly behind in the general election. Scenario 2: Obama continues his surge and takes the nomination in a close race. This consolidates the Democratic base and Obama builds on this momentum to gain strength in the general election. Either way, "Clinton Fatigue" may finally doom Hillary. Scenario 3 is a grand Clinton/Obama coalition. . .but I don't really see that happening.
For the Republicans, McCain is now in a position to focus on party unity by rallying around the shared animosity towards Clinton and Obama. Already, Republican stalwarts are coming around to the idea of a McCain presidency. On any issue that really matters to most Republicans, such as low taxes and spending, judicial appointments, and success in the war against terror, McCain is clearly positioned to both appeal to the Republican base as well as to challenge Democrats. He will need an inspired VP pick (and it won't be Huckabee).
The Republicans also better get serious about supporting qualified candidates for the House and Senate, and should even start looking ahead to 2010.
But like I said before: It's a long way to November!