After having seen 6/8 initial games (missed Croatia-Ireland and England-France, some initial thoughts and predictions:
1. Favorites: Spain are still my favorites to win it, but only marginally, well below 50% probability. My next pick would be (perhaps surprisingly) the Netherlands (you heard it here first!), who, after being the butchers of WC 2010 came out to play this time around. If they can build some confidence and get out of the group of death after the initial defeat, they will be formidable opponents. Technically they looked quite good and created a lot of clear opportunities. Sneijder played a really impressive game in particular. I hope van Persie can find his form again after a woeful start. Though it's just as likely he and his team will do what the great Dutch teams of the past have always done best: play beautiful soccer and choke under pressure. It will be key for them to come out in the next game and not believe what everyone said about their first game, that they played poorly and need to reinvent themselves. If they play the same way, they'll have a great chance of beating Germany and Portugal and winning the group.
For Spain, well, they can continue to play with 6 midfielders and could even win the tournament that way with odd goals from Silva, Iniesta and Fabregas, but more likely they'll need Torres or Llorente to score at some point. Especially with Pique and Ramos not looking particularly comfortable with each other at the back (never having played together as a central defense pairing), they'll need more than the 1 goal a game that basically won them the World Cup. Not sure if that's gonna happen. On the other hand, Iniesta really stepped up as Spain's most dangerous player...if he keeps playing like that, he could be the player of the tournament and they won't need a striker.
2. Pleasant surprises: Italy held their own against Spain and are my other pick to advance from Group C. Ukraine were also impressive in midfield and attack (though perhaps not so much in defense, as they were quite lucky to escape with the victory in the end). But in a competitive tournament, home support can make all the difference. Russia also looked formidable in their first game, but the Czechs were awfully poor in defense, so I'll be watching their match closely tomorrow.
3. Disappointments: Portugal and Germany both looked lackluster. The Germans could well pull it together, but their midfield play was surprisingly vertical. Muller stuck to the right flank, Podolski to the left, leaving Oezil to be the only real creative force for them. They'll need more, particularly from Muller, to reclaim the exciting form they showed at the World Cup. I don't see the Portuguese advancing, and it'll be another disappointment for Ronaldo in a major tournament.