Along with McCain, he's got to be considered a frontrunner.
"But when selecting a President, Americans tend to vote on the basis of who they think will be the most effective leader. This tendency will be amplified in the next presidential election, when the nation will choose President Bush's successor as commander-in-chief in the War on Terror. That's why, even though a Giuliani victory may be difficult, it's far from impossible."
And THAT is the reason ANY of the potential Democrat nominees would face an uphill battle. (Hillary's triangulation skills don't qualify her as a "leader".)
Not to completely rule out Romney, Huckabee, or several other folks, but McCain vs Giuliani is going to be the contest for the GOP nomination.
All this is subject to change however, if the "Draft Condi Rice" movement gets its wish.