Palin will remain as the republican VP nominee. She's there to bolster Stevens' reelection.
Palin is a horrible choice but I think the Republicans know that Obama will likely be the next president. They also know that they're hemorrhaging bodies out of the Senate and may lost filibuster power. So Palin has been inserted hoping that her coat tails will help Ted Stevens get reelected despite the Federal indictment.
Should the plan work, Sen. Stevens can resign allowing Palin to appoint a republican to the position. If it does not the Republicans lose their most senior member in the Senate and give Democrats a foothold into a traditionally republican state.