President-elect Barack Obama began 2008 with an unexpected victory over Hillary Clinton in the Iowa Caucuses.

The two Democratic presidential candidates spent the next five months battling it out in primaries and caucuses around the country.

Meanwhile, one-time Republican frontrunner Rudy Giuliani's campaign imploded.

John McCain, whose campaign was all but left for dead in 2007, waged an extraordinary comeback to surge ahead of the pack and win the Republican nomination in March.

Obama finally clinched the nomination in June, but brushed off calls to choose Hillary Clinton as his running mate. Instead, Delaware Senator Joe Biden made the cut.

As Obama made history, officially becoming the first African American presidential nominee at the Democratic Convention in Denver.

Hoping to take the wind out of Obama's sails, McCain announces his surprise vice presidential pick the next day -- Alaska Governor Sarah Palin.

The relatively unknown governor shakes up the race and the media scrutiny of her perceived inexperience intensified.

Already facing an investigation back home, the campaign disclosed that her teenage daughter was pregnant.

Doubts swirled about McCain's choice, but Palin came out swinging at the Republican convention.

Tina Fey debuted what would later become a wildly popular, and arguably influential, impersonation of Palin on Saturday Night Live.

The general election campaign lasted just two months. A race that looked to be tight turned into a runaway for Obama when the bottom dropped out of the stock market.

With the country's finances in a tailspin, McCain made a statement that would come back to haunt him saying, "the fundamentals of our economy are strong."

McCain then announced that he was going to suspend his campaign to race back to Washington to get a bailout package passed.

Obama then portrayed him as unsteady and out of touch.

The tenor of Republican rallies heated up, as McCain and Palin resurrected Obama's controversial ties to 1960's radical Bill Ayers --hoping to cast doubt on his judgement.

In the end, the country's economic insecurity was top on voters' minds.

Obama easily beat McCain -- shattering racial barriers and making history. Streets in several city neighborhoods erupted in celebration.

But Obama faces huge hurdles as he enters the White House. As the economy continues to falter and the country wages two wars abroad, he'll need hope to be in large supply.