It's more basic than all that....
This whole thing about O vs P is both premature and slightly beside the point. Sarah's bus, both literally and figuratively, could go over a cliff tomorrow. Obama, like any incumbent is not going to just be campaigning against his opponent but also will be making a defence of his first term. He has to answer the uber-question that faces any incumbent President " ...are we better off than we were four years ago.." Regardless of who he is running against it looks like he is losing out to that question. His biggest problem in this regard, I think, is that he took a very pro-active and interventionist approach to the recession-he continued the Hank Paulson bailout of the banks wihout any real attempt to back off despite the overwhelming opposition of the people; he interfered, arguably needlessly, in the bailout of Detroit again contrary to the prevailing winds; he undertook the 'stimulus' spending in a way that almost guaranteed it would be only marginally helpful at tremendous cost and worse, actually pegged performance to it (unemployment under 8%, GDP growth of 3-4%, save or create 3 million jobs). He promised to close Gitmo and halt military tribunals; he escalted the war in Afghanistan etc etc Let's not even mention the Trojan Horse of Health Care Reform
The bill of particulars is pretty long against him on the "..better off.." test. So that is a bigger problem than who specifically runs against him because all of that is available to any of them. He is in the unenviable and untenable postition of having to run on something like "...it would have been a lot worse without me.." Terrible stance to have to take-both unproveable and easily countered by "..oh no it wouldn't .." Who, including he, can prove a counter event.
If Palin were to be his opponent the whole thing would almost certainly become a persoanlity contest on top of all of that for the great mass of unaligned voters. They would have his record and his defence of it to look at and in her case her attacks on him and the leftists in general and what she would have done different etc, etc, but that's about it. She has no great track record except as a media personality-her bailing out of high elected post will be shoved down her throat at every opportunity, her engineering of the windfall profit oil tax will be too. And that will be in her battle with other Republicans. She would be forced to run on ideology alone and maybe that could work but there isn't much evidence that it would, other, essentially lame candidates for the Tea Party didn't do too well in the mid terms. Rand Paul did well because he and his dad have been coherent, consistent and serious, she hasn't been any of those things; and the Pauls are too extreme for most voters.