I think Palin is a brilliant move on McCain's part. He didn't have a lot of attractive choices. People hate Romney, and don't care about Pawlenty, Crist, et al.
Palin shores up his standing with evangelicals and the hardcore base, and allows him to break far more openly with Bush (McCain had been forced to run to the right because he was so disliked by the right wing of the GOP).
It also "junks" up the discussion of change, and brings him far more publicity than any other potential pick, even Lieberman.
True, it renders it difficult to attack Obama for inexperience, but that line of attack wasn't working anyways.
I think the Palin pick increases McCain's chances. Now he has to follow up by taking advantage of the shift in circumstances.