Ok, this is a common expression and Obama (and McCain) may have used it before. Obama probably didn't mean to explicitly call Palin a pig. Given all of that, Obama still deserves all the grief he has gotten over this remoark for a couple of reasons.
Fisrt, the most memorable line out of both conventions was the one about the difference between a pit bull and a hockey mom - lipstick. After that, Obama and his advisors should have scrubbed his speaches so that there were no mentions of lipstick, just to avoid this sort of situation. He didn't do this and is paying the price.
The second reason has to do with how Obama's supporters have been acting during the campaign. For months they have been disecting everything said about Obama, looking for hidden, racially coded messages. Suddenly, anything could become a racial code word. When Biden described Obama as "articulate", he didn't add, "For a black man." This was added for him by Obama supporters who then forced Biden to appologise for something that he hadn't said.
Obama never did anything to stop this. Instead, he benefitted from it. He could easily have made a statement saying that he was positive that Biden did not mean anything racial. Obama never did this, even when he invited Biden onto the ticket.
Obama ran a campaign where every utterance can be twisted into a coded reference so it is fitting that this should be used against him.