I feel winded listening to that speech. I’m sitting in my chair but feeling like I have to catch my breath. It was remarkable and will take some time to process. But here is my quick, gut reaction.
His distancing from Jeremiah Wright’s statements was effective because he not only said he disagreed but why he disagreed.

“But the remarks that have caused this recent firestorm weren’t simply controversial. They weren’t simply a religious leader’s effort to speak out against perceived injustice. Instead, they expressed a profoundly distorted view of this country – a view that sees white racism as endemic, and that elevates what is wrong with America above all that we know is right with America; a view that sees the conflicts in the Middle East as rooted primarily in the actions of stalwart allies like Israel, instead of emanating from the perverse and hateful ideologies of radical Islam.”

And this:

“The profound mistake of Reverend Wright’s sermons is not that he spoke about racism in our society. It’s that he spoke as if our society was static; as if no progress has been made.”

I’ve believed that Obama’s primary (short term) task was not to explain what he agreed with and disagreed with but rather why he stayed in the church. His answer on that was twofold: 1) This church does a lot of good 2) Wright brought me to God. I ultimately think that the second answer will be the more effective one. “He strengthened my faith, officiated my wedding, and baptized my children.” Quoting from his book, he said:

“And in that single note – hope! – I heard something else; at the foot of that cross, inside the thousands of churches across the city, I imagined the stories of ordinary black people merging with the stories of David and Goliath, Moses and Pharaoh, the Christians in the lion’s den, Ezekiel’s field of dry bones. Those stories – of survival, and freedom, and hope – became our story, my story..

”
For many white Americans it will be the first time they hear Obama say things that only a black politician can say:

“The church contains in full the kindness and cruelty, the fierce intelligence and the shocking ignorance, the struggles and successes, the love and yes, the bitterness and bias that make up the black experience in America.”

Most remarkably, and most importantly, he attempted to speak to the anxieties and wounds of both blacks and whites. He spoke both as a black man and the son of a white woman. Probably the most extraordinary passage was this one:

I can no more disown him than I can disown the black community. I can no more disown him than I can my white grandmother – a woman who helped raise me, a woman who sacrificed again and again for me, a woman who loves me as much as she loves anything in this world, but a woman who once confessed her fear of black men who passed by her on the street, and who on more than one occasion has uttered racial or ethnic stereotypes that made me cringe.

And this, which is probably the most empathetic I’ve ever heard a black politician be toward angry whites:

“And yet, to wish away the resentments of white Americans, to label them as misguided or even racist, without recognizing they are grounded in legitimate concerns – this too widens the racial divide, and blocks the path to understanding.”

Embarrassingly, I want to end on a pedestrian, tactical note. Obama had made a mistake in an earlier tatement implying that he had only ever heard Wright speak about loving one’s neighbor. This made Obama seem dishonest (it just didn’t seem plausible) and meant he would have to explain every newly discovered Wright soundbite. He walked back from that a bit in this speech.

“For some, nagging questions remain. Did I know him to be an occasionally fierce critic of American domestic and foreign policy? Of course. Did I ever hear him make remarks that could be considered controversial while I sat in church? Yes. Did I strongly disagree with many of his political views? Absolutely – just as I’m sure many of you have heard remarks from your pastors, priests, or rabbis with which you strongly disagreed.”

I actually think this was the one paragraph in the speech that wasn’t quite pitch perfect. “Could be considered controversial”? He could have gone farther than that (and certainly has in regard to the clips that have gained prominence).
But in the end, the real risk of the speech was that he dove directly into the central issue of race. He realized that he could no longer “transcend” race by not talking about it. He had to wade directly in. I don’t know whether it will be effective or not. But it surely was historic.