Either way, this is very bad news for Romney.
Which could make sense since you're assuming an establishment in control and both Romney and Gingrich are seen as establishment candidates, Gingrich much more so. I don't think the establishment has that much control however. For that to be seen, the establishment has to diverge more with the people and candidates and that's not very extant in the GOP except in the case of Ron Paul.
Can someone explain to this Canadian what this means? I thought Romney won in the past two primaries? If he loses (or lost) SC, what does this mean for the leadership race?
The Republicans are picking their candidate. Typically, only registered Republicans can vote though some states allow anyone to vote (by choice of the local Republican Party) Iowa has gone for Santorum because of a recount, but since that was an open primary an equal amount of delegates went to Romney because they tied. Romney won New Hampshire. Gingrich has won South Carolina. Romney still leads the delegate count with 19 and Gingrich has 17. 1144 delegates are needed to win the Republican (GOP) party nomination. The Florida primary is next with 50 delegates at stake and winner take all like SC. Florida did have 99 delegates but the GOP punished them for moving their primary date.
If people are influenced by trends (perception), then the SC win is huge for Gingrich since Romney was leading there by 20% but lost it after good debate performance by Newt Gingrich. Romney currently still leads in Florida, again by 20% but the Newt win in SC almost surely means people will be changing their minds in Florida and hence Romney has agree to two more debates. If Romney had won SC, it would have been to his advantage to debate no longer. Now both Gingrich and Romney feel the need to debate to hold on to what they have and capitalize on it.
The GOP is mostly fixed on who can beat Obama and that is a good thing since Obama and the Democrats are so far left they are destroying the nation. There is an incredible amount of pressure because a Democrat victory in November cements Obamacare and ensures probably at least two left wing nominations for Supreme Court which means America goes hard left for the foreseeable future. So ANY Republican is palatable to Republicans right now, as long as they can beat Obama. However, Republicans are generally dissatisfied with the field and Obama's media allies are making hay because it's in their interest to keep the GOP primaries unsettled, hence the debate on whether or not to release the Gingrich scandal story.
The Republicans made a HUGE mistake with McCain in 2008. I think they will make the same mistake if Gingrich is the nominee. I think someone like Jeb Bush or Chris Christie could still enter the race if they could get their names on enough state ballots quickly enough and take the nomination.