Everything on Election Day went pretty much as expected. Republicans are up, Democrats are down, and Dick Morris once again looks like a fool. But as big as Tuesday was politically, it lacked, as have past midterms, a feeling of punctuation. No sooner had the House changed hands than speculation began on 2012 Republican presidential candidates. This is in large part due to the obsessive political media (GOP pollster Rasmussen has already polled the likely matchups). One election cycle ends, and the next immediately begins.

And while we're still about 14 months from the first votes being cast in the 2012 elections, we're nonetheless going to get a protracted and dramatic look at the selection process for the Republican nomination. All we have to do is switch on Fox News.

The Murdoch network currently has on its payroll no fewer than four right-wingers whose names consistently pop up in discussions of President Obama's putative GOP challengers: Sarah Palin, Newt Gingrich, Rick Santorum, and Mike Huckabee. Fox also frequently hosts former U.N. Ambassador John Bolton, whose name has been tossed around as a dark-horse candidate. As the election cycle coverage heats up, Fox will be forced to make some awkward choices in how it covers the campaigns of their colleagues.

And the trouble has already begun.

While not a candidate himself, Fox News' Karl Rove will be a key player in the 2012 GOP primaries, largely through his Wall Street-funded Republican piggy bank, American Crossroads. One can speculate as to which candidate he prefers, but one doesn't have to guess who he doesn't want to challenge Obama -- Fox News' Sarah Palin.

The feud between these two has been simmering since Palin injected herself into the Republican primaries of various Senate campaigns and helped Tea Party candidates snatch nominations from more electable Republicans, only to see them lose in the general election (see: Sharron Angle and, if trends hold, Joe Miller.)

But no candidate better represented the Rove-Palin rift than Delaware's Christine O'Donnell, who secured the nomination on the strength of Palin's endorsement and then bombed in the general. Not long after O'Donnell was minted as the nominee, Rove said (on Fox) that she did not “evince the characteristics of rectitude and truthfulness” and that the race had become unwinnable. Those remarks earned him a keel hauling from the right-wing media. Palin, for her part, said (also on Fox) that everyone who thought O'Donnell couldn't win needed to “buck up” and put aside their “egos.”

As the Senate looked more and more like it would stay in Democratic hands, Rove and Palin quit fighting through proxies and just started bashing each other. Last week, the U.K. Telegraph reported that Rove trashed Palin's new reality TV program and “said it was unlikely that voters would regard someone starring in a reality show as presidential material.” The article also quoted Rove saying Palin lacks “a certain level of gravitas.”

Palin, as we all know, thrives on victimhood and will never fail to respond to any criticism, no matter how slight or imagined. She fired back at Rove (again on Fox News) by suggesting he is “threatened” and “paranoid.” She also compared herself to Ronald Reagan, though he was a TV star before he was politician, not the other way around. A couple of days later (on Fox News) she lobbed a nonspecific attack at “these Neanderthals, these goofballs, these nitwits” who were attacking her in the press.

Rove is, of course, not without allies in this fight. His former Bush administration colleagues -- like speechwriter Michael Gerson and, reportedly, W. himself -- don't think much of Palin as a candidate. He also has the support of Fox News colleague Mort Kondracke, who blamed Palin for the Republican failure to capture the Senate and called her “a joke even within her own party.” His problem is that Palin also has allies -- namely, the louder corners of the right-wing media. Having already earned their wrath over his O'Donnell criticism, Rove apologized to Palin (once again, on Fox News), saying he “didn't mean any offense” in criticizing her reality program.

Palin also has the tea party firmly in her corner, and Rove has to respect that. Even though several of her anointed Senate candidates were wiped out on Tuesday, the fact that they were even in a position to lose is a testament to Palin's political clout. And so Rove has to thread the needle of making Palin an unacceptable choice for the nomination while not alienating her powerful base of support. So he attacks Christine O'Donnell, and then apologizes. He attacks Palin, and then apologizes.

In the middle of all this is Fox News. The network was going to be a battleground for the nomination regardless, given that they essentially operate as a shadow RNC and willingly offer their airwaves to Republican candidates looking to do a little fundraising. And they've already launched a series of candidate profiles called “12 in '12.” But having numerous potential candidates on their payroll complicates things even further.

Palin's being coy about her presidential prospects, but the millions of dollars Fox News pays her (and the Alaska-based studio they built for her) will undoubtedly prove useful should she choose to toss in her hat. Rove isn't running, but he nonetheless will have a dog in the fight and financial interests wrapped up in the race, and Fox is paying him for -- ahem -- “independent” political analysis.

And then there's Huckabee, who ingratiates himself to potential voters and key GOP officials with each episode of his Fox News program. One can never tell whether Newt Gingrich's threats to run for president are genuine or just a ploy to sell books, and if Santorum runs he'll have some interesting hurdles to clear, but having a paid platform to get their messages out certainly doesn't hurt. Just this week Santorum gushed about how great it is that Republicans have Fox News to “get a message out.”

There are interests conflicting all over the place, and what we're seeing now with Palin and Rove is a situation where political figures are appearing on a news channel to attack one another and defend their interests, and being paid for it by that same news channel. When you mix that in with parent company News Corp.'s newfound willingness to openly donate huge sums of cash to partisan GOP outfits, you have an ethical morass that borders on comical.

Fox's past response to their (many) ethical lapses has been to pretend that nothing's wrong. But this is a bigger breach of journalistic ethics than anything they've done before, and whether they can continue to play dumb remains to be seen.

But one thing's for sure: The road to the 2012 Republican presidential nomination runs right through Fox News.