This is really a huge upset for Hillary's campaign, considering that she led in South Carolina 42%-34% in a CNN poll from mid-December. Even the latest polls only gave Obama about an 11% advantage on average, so he surged about 14% above their expectations.
Turnout was high, and the white vote for Obama was surprisingly better than predicted, which is a healthy thing overall.
It will be interesting to see how this plays out with the media, as the Obama victory was *MUCH* larger than predicted, which will presumably give Obama a clear lead in delegates.
Despite likely efforts of the Clinton camp to downplay the landslide, Hillary Clinton's campaign really went all-out in South Carolina, greatly increasing their expenditures for a series of negative attack ads, and pulling Hillary Clinton back to the state from out-of-state fundraising appearances in order to try to prevent an embarassing loss.
To me, it seems South Carolinians viewed her campaign as being too negative, her husband as being too loud and divisive, and her campaign's priorities as being out of order. Arguably, the Clintons would've appreciated results that showed a racial divide that would encourage white voters to flock to her campaign, but ultimately, the people of South Carolina spoke pretty loudly, and they were a lot more united than the Clintons gave them credit for.