Yes, it's real, and it's spectacular. Skip to the fifty second mark after the douche who found the video finishes going off about how sweet he is that he found it. Although he is pretty sweet, the media has been hunting for this for weeks.

No it's not like finding out that she did porn or something, but it's Sarah Palin....in an actual swimsuit...that doesn't involve photoshop. It's like the Holy Grail.

UPDATE: Video down, how is this copyright infringment? McCain campaign sabatoge!

UPDATE PART DEUX: I found a new one. I rock.