More on the Policy Analysis Market which certain U.S. senators pressured the Pentagon into abandoning:
Two assistant professors of economics at Stanford's GSB also make a case for the market in the WaPo.
Brad DeLong and his readers discuss it here.
Slate reviews the various prediction markets available online.
TradeSports is a good example to look at. It has markets on the date of Saddam's capture, the date of Osama's capture, the bankruptcy of American Airlines, Kobe's going to trial and if he goes, whether he'll be found guilty, whether Tony Blair will be forced out, U.S. Democratic primaries and caucuses, and Gray Davis surviving the recall vote.
Tyler Cowen has three objections to the market that the Defense Department abandoned, the market for when terrrorists will strike. I think the first two are weak and the third is questionable.