I would expect Governor Gregiore to win re-election probably over Dino Rossi. If he does win the Republican primary, it'll just be a campaign to stay that the Washington Governorship was robbed from him the last time. And now he want's to get what's really his.
Ron Sims, King County Executive, is planning to challenge Governor Gregiore for the Democratic Gubernatorial primary. I highly doubt he'd win. However, he could spark a liberal leaning Independent candidacy, but this probably wouldn't damage the Gregiore campaign.
My prediction:
Gregoire (D) 53%
Rossi (R) 45%
Others 2%
A Primary challenge would damage her in the general election though. What does Sims think he's doing?! Does he want Rossi to win after all?