In 2000, the entire Presidential election depended on a few hundred votes in Florida.
In 2004, the only battlefield of any significance was in Ohio, which was decided by a 2% margin.
This year, it's looking more and more like the fight will be for Virginia. As of right now, the marginal states, the ones that can flip back and forth, are Colorado, Montana, Nevada, Ohio, and Virginia. New Mexico and Pennsylvania are looking pretty solidly Democratic, and the more Obama tries to make gains in Florida, the more he seems to lose ground. (A buddy said half a year ago that the Che posters were going to hurt him there and I didn't contradict him.) With sustained effort, luck, and smart campaigning, any of these states could swing the other way. But unless there is a change of momentum, that's the most likely way things will shake out. Virginia is the real toss-up state.
There is no realistic scenario I can imagine that enables McCain to win while losing the traditionally Republican Virginia. (Virginia has voted Republican in every Presidential election since Eisenhower's, with only one exception, that being LBJ's victory there in 1964.) But there are plenty of realistic scenarios that allow Obama to win even if McCain retains both Virginia and Florida in the GOP column. To actually win, Obama needs to keep Michigan, Ohio, and Pennsylvania locked up.
Demographically, Virginia is not a bad representative slice of America. It has an old-industry manufacturing city in Richmond, a new-era tech center in the D.C. suburbs, a prominent defense-industry center in Newport News, and a substantial rural population in its south and west. It's very closely and evenly split between Republicans and Democrats, and members of both parties fall into a variety of political sympathies with reasonably large contingents of conservative Democrats and RINOs throwing weight around intramural squabbles. Its politicians (at least the successful ones) tend to be on the moderate side compared to office holders from other states who profit politically from taking more extreme positions.
Strategically, as long as Obama can press an advantage in Virginia, he'll be winning for sure. For Obama, Virginia is the tipping point between being elected and running up the score in the Electoral College. For McCain, Virginia is a firewall that he cannot afford to lose. And right now, Virginia is a complete toss-up in the polls, which is why there is Veep buzz in both parties about politicians from there -- Governor Tim Kaine for the Democrats, and Congressman Eric Cantor for the Republicans.
I still think the best available choices would be Kathleen Sibelius and Sarah Palin, the Governors of Kansas and Alaska. Governor Palin lacks any tangible plus to bring to the GOP table, unfortunately, and she may have to wait four or eight years. The other prominent name being leaked out from Camp McCain is Rob Portman from Ohio, who I think would be a big mistake given his service as budget director for Bush; Bobby Jindal seems to have taken himself out of the running (perhaps because he wants to run for the top spot himself in 2012?). And no one has talked about Charlie Crist for a while but McCain still owes him, big-time. He even got engaged to make himself eligible. For the Democrats, Governor Sibelius seems to be overshadowed by Governor Kaine and Senator Evan Bayh.
But given that the battle line appears to be somewhere approximating I-64, it's not surprising that both candidates are making it known that they're looking closely at Virginians as their stand-ins as they court Cavalier votes.