Newsweek is doing a seven-part story on the 2008 campaign which provides all manner of fascinating behind-the-scenes perspectives. The installment on the period of time spanning the debates is notable for the discussion of how the Otherization of Obama proceeded in the background:

At the Clearwater rally, someone in the crowd used a racial epithet
about a black sound man for NBC, and someone else reportedly yelled
“Kill him!” in an ambiguous reference to either Ayers or Obama. By the
end of the week, YouTube was showing film clips of Palin crowds
shouting “Treason!”, “Off with his head!” and “He is a bomb!” At a
McCain-Palin rally in Strongsville, Ohio, a man called Obama a “one-man
terror cell,” and in one unsettling film clip a voter’s young daughter
exclaims about Obama, “You need gloves to touch him!”

Palin,
the polls showed, had succeeded in rallying the Republican base. But
she, or the simmering anger around her, helped make Obama supporters
out of countless independent voters.

On the weekend
between the second and third debates, Congressman John Lewis–a
civil-rights hero who had been beaten while staging nonviolent protests
during the 1960s–issued a press release accusing McCain and Palin of
“playing with fire” and seeming to compare McCain to former Alabama
governor George Wallace, a segregationist infamous for stirring racial
fears. McCain was stunned. He had devoted a chapter to Lewis in one of
his books, “Why Courage Matters.” He so admired Lewis that he had taken
his children to meet him.

McCain was on his bus, about
to board a plane in Moline, Ill., when he read the remarks on an aide’s
BlackBerry. He was so dumbfounded that he held the plane on the tarmac
while he considered how to respond. Salter, who had penned the chapter
on Lewis, urged McCain to remain more dignified than Lewis had been in
his remarks. But Schmidt called in from headquarters brimming with
outrage. “Sir,” said Schmidt, “he called you a racist. It must be
responded to.” Nicolle Wallace agreed. Salter was not so sure. He was
“very pained” over the incident, Schmidt later recalled about Salter,
but his instinct told him not to get his boss into a name-calling fight
with a martyr of the civil-rights movement. McCain decided to go with
Schmidt and put out a strong statement calling on Obama to “immediately
and personally repudiate these outrageous and divisive comments.”
(Obama left it to a spokesman to blandly state, “Senator Obama does not
believe that John McCain or his policy criticism is in any way
comparable to George Wallace or his segregationist policies.”)

According
to several aides, McCain had trouble shaking his sadness over Lewis’s
statement. To the reporters traveling with McCain, the candidate seemed
uncertain, as if he was not quite sure what he had gotten himself into.
In an effort to raise doubts about Obama, McCain had given a stump
speech in which he asked the audience, “Who is Barack Obama?”
At an earlier rally in Albuquerque a man shouted, “A terrorist!” McCain
paused, taken aback. He looked surprised, troubled. But he continued
with the speech. (Salter later said McCain wasn’t sure that he had
heard correctly.)

A couple of days later, at a rally in
Lakeville, Minn., he seemed to find his bearings. “If you want a fight,
we will fight,” he said. “But we will be respectful. I admire Senator
Obama and his accomplishments. I will respect him, and I want–no, no,”
McCain said to loud boos. “I want everyone to be respectful.” In the
question-and-answer period, a middle-aged woman in a bright red shirt
took the mike and said, “I can’t trust Obama. I have read about him,
and he’s not, he’s not, he’s a, um–he’s an Arab.”

“No.
No, ma’am. No, ma’am. No, ma’am. No, ma’am,” McCain said, taking back
the wireless mike. “He’s a decent family man, a citizen, that I just
happen to have disagreements with on fundamental issues; that’s what
this campaign is about. He’s not. Thank you.”

For what it’s worth, the Secret Service reviewed the tapes and it seems that no one actually yelled “kill him” at the Palin rally, but everything else is as described above.

It’s clear that McCain was reluctant to enter the fever swamp, whereas Palin marched right in. I note that it took Lewis’ denunciation for McCain to really wake up to what was going on, and after that point is when the candidate started trying to tamp it down.

The campaign’s internal polls showed that those lower-income swing
voters in industrial states had not forgotten about Wright. In the view
of some of his advisers, McCain had a chance to really hurt Obama by
dredging up those videotapes of his longtime pastor crying “Goddam
America!” But McCain did not want to. He did not want to do anything
that smacked of racism. Some of his aides had quietly wished that the
527s, the independent- expenditure groups, would do the campaign’s
dirty work by running ads about Wright. Yet others worried that the
527s would indeed run lurid ads about Wright–and that McCain would get
the blame. In any case, the big conservative moneymen who might fund
such a smear campaign were lying low, and not just because their
portfolios were suffering in the stock-market dive. They didn’t want to
be called racist, either.

McCain had set firm
boundaries: no Jeremiah Wright; no attacking Michelle Obama; no
attacking Obama for not serving in the military. McCain balked at an ad
using images of children that suggested that Obama might not protect
them from terrorism; Schmidt vetoed ads suggesting that Obama was soft
on crime (no Willie Hortons); and before word even got to McCain,
Schmidt and Salter scuttled a “celebrity” ad of Obama dancing with
talk-show host Ellen DeGeneres (the sight of a black man dancing with a
lesbian was deemed too provocative).

However, the damage had been done:

“I’m worried,” Gregory Craig said to a NEWSWEEK reporter in
mid-October. He was concerned that the frenzied atmosphere at the Palin
rallies would encourage someone to do something violent toward Obama.
He was not the only one in the Obama campaign thinking the unthinkable.
The campaign was provided with reports from the Secret Service showing
a sharp and very disturbing increase in threats to Obama in September
and early October. Michelle was shaken by the vituperative crowds and
the hot rhetoric from the GOP candidates. “Why would they try to make
people hate us?” she asked Valerie Jarrett. Several of Obama’s friends
in the Senate were shocked by the GOP rabble-rousing. Dick Durbin, the
U.S. senator from Illinois who pushed for early Secret Service coverage
for Obama, called Lindsey Graham, who was traveling with McCain.

That damage persists now, after the election.