Kadima led by Livni might still come out on top, and would have enhanced credibility, though far less room to manuever on peace process issues. Likud, however, is probably still the favorite, and would spell the end of real negotiations now just like they did in the late 1990's. Daniel Levy notes that Morris Talansky, the key witness against Olmert, may be motivated by opposition to his former associate's new politics. Al-Jazeera reported earlier that these charges were pushed by people from the rightest group that was around Olmert in is days as mayor.
I do think, however, that Levy gives Olmert too much credit for his stands on peace negotiations. For one thing, I've still never been fully convinced by Olmert's line that he wasn't negotiating with Syria due to pressure from the Bush administration. It's certainly possible that negotiating now is just an attempt to make him a hero on the left, as his critics claim. As for his statements about Israel not being able to hold the Occupied Territories, I'm not sure many even in Likud think Israel can hold onto all the West Bank in perpetuity, and read his tenure as prime minister in the context of Israel coming over time to accept the need for a Palestinian state, a sharp leftward shift over the past 15-20 years that will probably continue regardless of what any individual prime minister says or does.
(Crossposted to American Footprints)