So, Why do People "Believe" It?
Despite the overwhelming physical evidence (the Obama campaign did in fact produce a copy of his birth certificate, and others even dug up the local Hawaiian newspaper from 1961 that has the Obama family birth announcement), it was promoted quite heavily by some Conservative commentators right up to Election Day and lives on in places like the Free Republic forums to this very day.
After all, you already had a guy with a foreign-sounding name, so what better way to influence a Presidential election than by suggesting the candidate is about as American as borscht?
Now that Obama has been elected and the Supreme Court has shot down legal challenges regarding his citizenship multiple times, the vast majority of political commentators quickly let this one die. A few committed critics of Obama still cling to it, though.
After all, conspiracy theories never really die, they just wait for people to forget the evidence against it and bring it up later (hell, they've kept the JFK assassination conspiracy theory alive for 46 years). Right up until the day Obama leaves office, there will be a pocket of those who hold out hope that one day a birth certificate will emerge that shows Obama was born in the mountains of Pakistan from the womb of Satan, and then he'll be forced to flee the White House, revealed to the world as the gay communist Islamofascist terrorist they've always known him to be.