Lance reminded me about electoralmarkets today, which is cool enough that I want to point it out explicitly here.
Most people still use polls to predict who wins, while electoralmarkets uses people betting real money. They might use polling information, but any other sources of information are implicitly also allowed. A side-by-side comparison of how polls compare to prediction markets might be fun in a few months.
I like to keep an eye on Oddhead Blog, from a Yahoo researcher on Prediction Markets in general. There are tons of information on how they are indeed more efficient in predicting outcomes than polls and other methods.
David (of Yahoo) is doing some very interesting stuff with prediction markets. On a related note, we had some recent work at Coling on forecasting prediction markets using the morning newspaper (see Publications at dredze.com).