Yes, it is possible to invest in the futures of the United States Presidential Election of 2008, and no, it is not gambling with some offshore casino website.
You can do it through the Iowa Electronic Markets, which is run by the College of Business of the University of Iowa. Quotes are issued daily, price history is available along with graphs and a prospectus on their web site.
Is it legal? Yes, they have received two No Action letters from the Commodities Futures Trading Commission. Who holds on to the money? The University of Iowa. Their minimum investment is $5 and maximum investment is $500. They also have a way to invest in the futures of the Federal Funds Target Rate. Sounds like an interesting futures market.