I'm torn...

The Good:
Abigail Breslin nominated for Best Supporting Actress
Ryan Gosling nominated for Best Actor
Letters From Iwo Jima (a deserving film) nominated for Best Picture and Director
The Devil Wears Prada NOT nominated for Screenplay (or anything besides Streep and costumes)
Six nominations for Pan's Labyrinth
Dreamgirls getting the most nominations overall
Expected nominations for The Departed, Martin Scorsese, Jennifer Hudson, Eddie Murphy, Penelope Cruz, Kate Winslet, Helen Mirren, Judi Dench, Forest Whitaker, Jackie Earl Haley, Happy Feet, The Lives of Others

The Bad:
Leonardo DiCaprio nominated for Blood Diamond instead of The Departed
Dreamgirls' exclusion from the top categories (Picture & Director)
Volver not nominated for anything besides Penelope Cruz (including foreign film)
Mark Wahlberg as The Departed's ONLY acting nominee
Michael Sheen failing to be recognized for The Queen
The Black Dahlia is an Oscar nominee (for cinematography)
Poseidon is an Oscar nominee (for visual effects)

Those are pretty bad, especially the first four.

I still believe this is The Departed's Best Picture to lose. But Babel is now the most nominated Best Picture (7 nominations vs Departed's 5...The Queen has 6, Sunshine and Iwo Jima have 4). Only Babel and The Departed are nominated in the "key" Best Editing category. The dynamic has really changed. And sadly I think the race is a lot less interesting without Dreamgirls.