Fred Thompson is to the Republicans in '08 as Wes Clark was to the Democrats in '04. In other words, the highpoint of his campaign will be the day he gets in the race, because once he's a serious candidate--and not just the fevered daydream of a dissatisfied base--voters will realize he's not all that.
It's an interesting parallel, and clearly there's some truth to it, but Thompson has one thing going for him that Clark didn't: He's a savvy politician, not a wide-eyed neophyte, and he clearly knows a thing or two about running for office. His non-campaign campaign to win the conservative base's heart - from the radio commentaries to the anti-Michael Moore YouTube bit - has been smarter politics than almost anything else we've seen from the Republican field so far, and it suggests that Thompson understands the voters he's trying to woo in a way that many of his rivals don't. Clark, by contrast, always seemed at once out-of-his-depth and deeply weird; he was a good candidate on paper, at least if you closed your eyes and squinted, but a disaster on the stump. And the enthusiasm for him was always more calculated than genuine; liberals liked him because they thought that nominating a soldier was the way to beat Bush, not because he appealed to them as liberals. Thompson, by contrast, is trying to appeal to the Right's heart as much as to its mind: He's seeking to be the conservative Howard Dean, the standard-bearer for the Republican wing of the Republican Party, except with the added bonus that he's more electable than Dean ever was.
Thompson has all sorts of other weaknesses, of course - the womanizing and the wife young enough to be his daughter, the touch of laziness and the lack of impressive political achievements, the long Senate voting record waiting to be picked apart. But he flat-out knows politics in a way that Wes Clark didn't, and that alone makes him a more formidable contender than the Supreme Allied Commander ever was.
Update: I see that Matt beat me to this point.