About two-thirds of the way through the debate, Barack Obama took a question about Louis Farrakhan's support for his campaign. He gave a sufficient, if not quite stellar answer--saying he'd repeatedly denounced Farrakhan's anti-Semitic statements, that he'd long been a supporter of Israel, etc. At that point Hillary asked to weigh in. Her voice softened a bit, and she began: "I just want to add something here, because I faced a similar situation when I ran for the Senate in 2000." I was sure she was going to invoke the firestorm she ignited after watching Suha Arafat deliver an anti-Israel tirade. Something like: "I stirred up a controversy by failing to condemn anti-Semitism, even though that's how I felt, so I understand how sensitive the issue can be. But I also know Senator Obama is a good friend of the Jewish people."
Instead, Hillary went with an anecdote whose point was to demonstrate her own vigilance on the issue. She lectured Obama about how it's not sufficient to denounce anti-Semites; you have to actively reject their support. It was a sanctimonious turn, and Obama defused it with typical good humor. "I have to say I don't see a difference between denouncing and rejecting," he said. "But if the word 'reject' Senator Clinton feels is stronger than the word 'denounce,' then I'm happy to concede the point, and I would reject and denounce."
That exchange pretty much summed up the debate for me: Hillary just a bit off tonally, Obama never really pressed or flummoxed. On health care, for example, Hillary tried again and again to denounce (or was it reject?) Obama for his attacks on her plan. She said they were based on "false, misleading and discredited information." She claimed that an Obama campaign mailing read "as though the health insurance companies and the Republicans wrote it."
In response, Obama calmly defended the logic of his criticism--that Hillary would either have to penalize some people for not buying insurance, or exempt them and leave them out of her plan (in which case hers was no more universal than his). Then he added this highly effective counterpunch: "Senator Clinton has ... constantly sent out negative attacks on us ... and we haven't whined about it because I understand that's the nature of this campaign." It both minimized Hillary's accusation and made her sound thin-skinned--the opposite of the battle-tested, Republican-slayer she purports to be.
This happened over and over. When Hillary said Obama's anti-war speech was all fine and good, but that they voted the same way once their opinions actually counted, Obama evocatively explained that, "Once we had driven the bus into the ditch, there were only so many ways we could get out. The question is: Who's making the decision initially to drive the bus into the ditch?" When Hillary brought up his vote against an amendment capping credit card interest at 30 percent, he pointed out that the amendment was attached to a horrendous bankruptcy bill, which he opposed and she had once supported. Hillary even tried getting to Obama's left by claiming he wanted to bomb Pakistan. Obama pointed out that he would only act on actionable intelligence against Al Qaeda targets that the Pakistani government wouldn't deal with. It made her sound over the top and actually bolstered his general election credentials.
Obama's only real wobbly moment came when the candidates fielded a question about Russian president Vladimir Putin's chosen successor, Dmitry Medvedev. Hillary gave a somewhat halting but basically correct answer about him being Putin's puppet. Obama didn't add much, pivoting instead to Bush's Russia policy in what felt like a slight nonsequitur. It wasn't clear how much he knew about the situation, which is dangerous for a candidate facing doubts about his preparedness. (Though obviously not so dangerous--Bush managed to get himself elected, after all.)
For her part, Hillary's worst moment was a completely unforced error, in which she protested the apparent media conspiracy against her: "Well, could I just point out that, in the last several debates, I seem to get the first question all the time?" she said near the outset. "And I don't mind. You know, I'll be happy to field them, but I do find it curious. And if anybody saw 'Saturday Night Live,' you know, maybe we should ask Barack if he's comfortable and needs another pillow."
In fairness, the "Meet the Press"-style format was clearly harder on Clinton than Obama. For whatever reason--maybe her longer record in Washington--she seemed to face more gotcha-style questions (on NAFTA, job creation, the release of White House archives), which disrupted her rhythm and made her sound defensive. MSNBC's habit of replaying recent campaign footage didn't serve her well either. We saw clips of her being snide and sarcastic toward Obama and nothing equivalent in the other direction.
On the other hand, the whole rationale for Clinton is that she's uniquely ready to deal with whatever comes her way. She almost literally stated that tonight, but she didn't do a great job demonstrating it.