Yeah, I don't think the NDP has much of a good chance. People are morse scared of them then the Conservatives. A good reason why the Liberals keep on getting elected, and why when we get tired of them we go to the right instead of the left.
The main problems are fiscal responsibility... and have been since the party was formed in the '60's.
Rae was elected because the NDP seemed a safe option due to him being very much a moderate (in that respect he predated New Labour and I'm pretty sure he influenced some people involved in it) and just not being that like that arrogrant prick of a premier (Peterson IIRC).
What he did wrong (and why it's taken until about now for the Ontario NDP to rebuild in some areas) was to introduce anti-union legislation (the social contract it was called IIRC) which at a stroke sent the NDP's base packing often, ironically, the the Harris Tories.