Emory University political scientist Alan Abramowitz sent out a useful analysis today that he's given me permission to post:
From fivethirtyeight.com today:
[T]here is another issue at hand: how much does the generic ballot really tell us about what will happen on Election Day? It might be the case that the generic ballot is fairly stable, but that doesn't necessarily mean it's all that useful an indicator. In addition to the fact that the consensus of polls (however careful we are about calibrating it) might be off in one or the other direction, there's also the fact that the thing which the generic ballot is ostensibly trying to predict -- the national House popular vote -- is relatively irrelevant to the disposition of the chamber, or the number of seats that each party earns. Instead, what we want to know is how the generic ballot translates into each of the 435 congressional districts; this is the sort of problem that we're hard at work upon.
Nate provides a lot of excellent analysis. But there are two pretty silly statements here. First, the generic ballot is a pretty good predictor of both the national popular vote and the national seat results. Second, the national popular vote is a very good predictor of the overall seat results. It definitely is not "relatively irrelevant" to those results. For all House elections since WW II, the correlation between national vote share and national seat share is a whopping .93:
For more on how the national vote translates into seats in the House, see Andrew Gelman and his co-authors on the 2006 and 2008 elections.
Update 8/19 10:01 AM: Silver responds here. For more on how the generic ballot can be used to forecast House election outcomes, see Abramowitz's 2006 PS article (PDF).