This article details a few of the better-known political prediction markets. These markets (at least some of them) allow participants to buy real($$$) contracts based on certain election outcomes. One of the sites, Intrade, also offers the opportunity to wager on a variety of subjects (weather, current events, etc). I’m not advocating for or assessing the legality of placing wagers (although I will say that this SHOULD be 100% legal), just pointing out that these sites will be a valuable source of information as the 2008 election approaches. By the way, the markets currently expect a match-up between Clinton and Giuliani. Yikes!
Prediction Markets for Politics