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While I'm admittedly biased, I found Palin's speech last night to be patronizing in tone and full of partisan rhetoric. Unfortunately, this is exactly what the Republicans wanted and she certainly delivered.
Unlike many other commenters, I believe Obama/Biden should be deeply concerned. Palin is a blank slate for which the Republicans can project any image they want, whether it be true or false. As we have already seen, Palin will criticize any negative media reporting as being a result of the "liberal media" and her counterparts will levy the "sexism" charge. Both of these charges are baseless, but it’s not as if this is the first time Republicans have decided to embrace their fictional world view over the actual truth.
I'm really disappointed with the Democratic response as well. I watched Biden on CNN this morning. His response was far weaker than I was hoping for. Actually he was practically praising Palin for her speech last night. If Obama and Biden continue to think they can take the high road with the Republicans, and refuse to respond in a meaningful manner against the Republican smear machine, then Obama and Biden will lose this election.