I have seen this tactic at work before. In war, it is refered to as using cannon fodder. In an RTS, its reffered to as a meat shield. In whatever form you recognize it, it is clear, Sarah Palin is being user as an object to divert attention. From what?
From McCain.
John McCain is the problem, and he still sucks as a candidate, and Sarah Palin brings NOTHING to the ticket. The evangelical sheep? They have already fallen in line. On the major issues in this election, she has experience that is almost worthless. In substantive and important ways this was an aweful pick, but in the bullshit tabloid universe this pick is smart provided it is followed up by strategy. I think that strategy is going to be using her as a meat shield. That means the second that she is critisized for anything, and I mean ANYTHING, the entirety of the Republican party will in unison scream bloody murder about how cruel and sexist the Obama campaign is and how "this is just like what they did to Hillary." Calling Obama sexist will have two different aims:
1) trying to woo the cult of personality assholes who supported hillary (disclaimer: not all hillary supporters are/were cult of personality assholes, only a very small percentage. For the record there are cult of personality assholes who support Obama as well.)
2) another "issue" that concious or subconcious racists will use to excuse their racism. If theres one thing they hate more than a black man "stealing" a white woman, it's a black man beating up on a white woman, even if it's just a verbal beating.

The campaign will become all about Sarah Palin, who is much easier to sell visually than McCain. Your Bill Orallys of the world will jorney to the hights of hipocracy mountain with claims of "thats just wrong!". Then, cue the "misty eyes" and emotional appeal, and bingo, you have a rags to riches Cinderella story about her improbable rise to the national stage. By the way, I think we can all imagine how the media will eat this crap up. At that point, "Rove's law" comes into play;

-the crazier the claim and the more consistently it is made, the more likely that it will become "common knowledge", regardless of it's basis in fact.

Think of the most damaging rumor that could work in concert with this running story line. Then, get some rich bastard to put up the money for a random email operation. I think you get the picture.
Some say that Karl Rove's shop was not in charge of this decision, but I think it's the complete opposite. He is the master of one thing, and that is understanding how to fool stupid people. Besides, McCain called his wife a "Cunt" in public. Is it even plausible that he is some crusader for women's rights?
There is something I think the Obama Campaign can do to riposte this perfectly though, and it is very simple.

IGNORE HER.

And I mean big time silence. Her name or current situation should not come out of Obama's mouth anymore. At the VP debates, Joe Biden should not even say her name once. This campaign is for President of the United States, and the President will be the one who drives policy and act as the face of our nation. If word one is said about this woman, it should be praise for her time as governor and good values. If she make a gaffe or says something stupid...............
SO THE HELL WHAT!!!!!!!!!!!!!
She is irelevant. She is not the problem.

We cannot beat Rove on his field, but keep in mind that he can't beat us on ours. His field is talking about Palin and bringing the disscussion to the tabloid universe. Our field is talking about McCain and keeping the policy discussion going.

We keep hitting McCain, we win.
We hit Palin, we get another 4 years.

For god's sake, ignore her.