I think most people miss the point of the Peace Prize. It is not so much given as a reward for work accomplished (though this counts) as much as a tool for change itself. It's basically a sticker that says "Hey, we like where you're going with this and keep it up!"

To quote the qualifications for the prize itself:

"...the most or the best work for fraternity between nations...for the holding and promotion of peace congresses"

Obama's election essentially caused the perception of America (to the rest of the world) to do a 180, we're once again ranked highly (or even #1 in some polls) on people's popularity charts.

Also,His willingness to again talk to nations once shut out of negotiations is a home-run as far as building fraternity between nations is concerned.

Were there people better qualified, given the guidelines of the prize? Probably. How many of those people wield the power and influence to further push for "fraternity between nations" and the "promotion of peace congresses?"

Viewed in this context, the prize going to Obama makes a good deal of sense.