
Whee! This is fun. Brian, here is why your concerns are misplaced:

See that tiny little uptick in the red line there? That's the thing that has everybody horrified. Meanwhile, Obama has since about April been consistently pulling 45-47% or so, which considering unallocated undecideds and a race with THREE prominent third-party candidates is clearly a winning percentage. Damn but Democrats scare easy.
To your specific points:
John McCain is a terrible candidate who is running a terrible campaign... Barack Obama, on the other hand, is the most exciting candidate the Democrats have ever had. So WHY IS HE ONLY WINNING BY TWO POINTS?!
Excitement about a candidate, and the quality of the campaign, will manifest itself almost entirely in election-day turnout and polls from the days immediately beforehand, as marginal base voters decide whether or not to bother voting. You can't measure that in August. Meanwhile, Obama's lead -- which has ranged in the past few months from about 2 to 7 -- reflects the structural advantages he has in this electorate very well. (I repeat: John McCain is not, in fact, winning.)
I disagree that people aren’t paying attention. This election is different from every other before it, and I think people are watching.
Be careful with your assumptions here. Yes, this election is different; but in order to know that, you have to have been paying attention already, and you have to be familiar with previous elections. That leaves out the huge and decisive portion of the American public that only follows politics with a passing interest, and which never pays attention before the conventions and Labor Day. It's quite likely that the politically-engaged population (like us, and all of our friends) is more excited and paying more attention than usual, but that doesn't matter, because we vote consistently. It's the disengaged, low-information marginal voters that matter.
But even if they’re not paying too much attention, every household in every swing state is currently getting bombarded with McCain’s attack ads. And while the ads may be completely freaking ridiculous, the problem is that they’re not being countered by the Obama campaign, and impressions are formed early and are hard to change.
Yes, there are a bunch of attack ads airing, but their main purpose right now isn't to reach marginal voters (who, I reiterate, don't give a damn this early) nearly as much as it is to define the media narrative which, in traditional campaigning, shapes the actual gameplay in September and October. Now, Obama's campaign is hardly traditional, and it's going to rely on a whole different voter universe (see: their startling voter registration efforts) than the one which is traditionally swayed by media, so I'm not too concerned about that.
I also reject the argument that the race is all about the electoral votes and the popular vote doesn’t matter.
I didn't say that. My point was that national polls aren't very indicative because they can't reflect Obama's weird impacts on turnout. Certainly a rising presidential tide lifts all downticket boats, and I expect that to happen much more dramatically than the polls can possibly represent.
...The thing to remember is that not only does Obama have a consistent lead, recent Chicken-Little-ism notwithstanding, but we can reasonably expect him to overperform that lead substantially on November 4. Feel better?
Ha! Raul, I remember you were in that class for like three weeks, and spent the whole time reading baseball news from ESPN.com. ;)
While coverage error is real, I don't buy into theories that it produces a significant bias -- mainly because past polling has been so close to actual election results. Of course, Obama scrambles all the usual turnout models, so there could well be an effect this time around; but absent any evidence (which we have no way of getting until after Nov. 4) I don't think it's responsible to make a prediction either way.
Especially the "cell phones" bit--that's crucial. Both (1) young people and (2) minorities are statistically more likely to use and only use cell phones. Both are among Obama's target demographics.
On cellphones -- hate to rain on the parade, but data shows that there's little to no difference between polling that includes cellphones and polling that doesn't, primarily because the underrepresentation of groups which use them more (young people, minorities, as you said) is then weighted for in the final sample. There does not appear to be a difference between cellphone users and non-cellphone users which isn't directly related to demographics.
Of course it's possible that response rates might be different among cellphone users, which would be a problem for the Pew study I linked (since all cells have caller ID, and because minutes cost money, some people are less likely to answer an unknown number); and in coming years as cell use increases and land-line use decreases, it no doubt will become a problem. But there isn't evidence that it's a serious factor this time around.
Thanks for the correction on weighting--I wasn't aware of that. It's good to know my opinion is being adjusted for, if not actually taken... ;)
Did anyone see this graph from Princeton?

While the opposite of Chicken-Littling (Pre-Hatch Egg-Counting?) is also dangerous, and I wouldn't at all say that the Presidential race is in the bag, even though saying things are in the bag is fun (try it!), it seems like worrying too much about the race is counterproductive, since it diverts energy away from worrying about House and Senate races that actually ought to be worried over. I'd prefer an Obama presidency by a 1% margin with huge D majorities in both houses rather than an Obama presidency by a blowout with only slight majorities and a bunch of dead-ender Blue Dogs.
On that note, Nate Silver (of FiveThirtyEight) has a similar, albeit more pessimistic, projection:
(I'd also note, re Garrett's comment, that an Obama blowout is more likely to produce huge congressional majorities, and vice versa for a thin victory; it's hard to imagine them moving in opposite direction unless something weird happens in the presidential race. Brian's point on that was quite right.)
...I am going to add a tag to this post under "FOR POLITICAL JUNKIES ONLY" or something...
There's certainly an obvious connection electorally between high Obama margins and Democratic victory. But there's probably a negative one between the amount of time political junkies spend worrying about Obama versus that which they could spend worrying about other races (and donating money, and writing editorials, &c &c). I would just hate to see everybody panic and devote all their energy to propping Obama up, when he probably doesn't need all of it, and it could be spent elsewhere.
i think another thing to
i think another thing to point out is that while most polling is done by phone, this leaves out a large amount of people who don't answer their phones, aren't home to answer their phones, or have cell phones. Markus, I know you took a class where coverage error was discussed. please inform us a little about how the polls standing still actually helps Obama in that perspective.