So where is Palin's place in politics?

Right in the middle of the fray, that's where. Ralph Reed has some interesting comments over at NRO. No matter, what you think about Palin, she is focusing the message that no other politician on the right OR left seems to be capable of doing. 

Meanwhile, the MSM are missing the bigger story, at least in the short term: Palin, whom they tried to drive out of respectable political discourse, is reenergizing the grassroots of a Republican party that they dismissed as dead. Their attacks against her — and the values she symbolizes — not only backfired, they are now working in her and the GOP's favor.

What ultimately drives the media crazy is they know instinctively they are co-conspirators in her rise. From the Katie Couric interview to the over-the-top attacks by the likes of Shrum, by overplaying their hand they made Palin a bigger force than they ever intended. Had they simply been fair to Palin when she ran for vice president and treated her with decency, she would not be viewed now by so many grassroots conservatives as a victim of irrational elitist hatred. As much as John McCain in selecting her as his running mate in 2008, the MSM made her a force, and she is proving she can use that platform very effectively indeed.