You have to remember that this is New York 2006. It's changed alot, no way in hell could a Conservative candidate win a senate seat and not just because he'd be a conservative but because the candidate, as I said before, would be a no name hack.
The NYGOP may be going down the toilet but the NYConservative Party has been in the sewers for awhile now.
I agree with the first part - there is no way whatsoever a Conservative would win the election in New York in 2006 (even if he is not a no-name hack). However, I wouldn't be surprised if enough Republicans aren't willing to vote for Weld to give the Conservatives a shot at the second place. Weld's appeal is to moderate Democrats and Republicans, and the Republican core in the state is not particularly moderate (at least, not moderate enough to vote for a pro-abortion, pro-gay-marriage Massachussets liberal).
Now, don't get me wrong - Weld was a good governor in Mass., and he'd likely be a good governor in New York. If a month before the election Spitzer eats little children on TV (or collapses in another fashion), he'd win in a landslide over any Conservative. I am confident that 3/4 of the state's population would by far prefer Weld over any Conservative. The problem is that they will, mostly, vote Dem, so it is not unconceivable that the final outcome is something like Dem 55%, Con 25% and Rep 20%.
Remember, the key advantage of the second party over the third party in the FPTP system is negated when the electoral result is viewed as predetermined. As far a "small c" conservative in NY is concerned, his vote can't affect the outcome whether he votes Rep or Con, so he might as well vote his preferred option. Add to this a slight wiff of scandal/incompetence on the college front (however unfair), and Cons do have a chance for the second spot.