Eric Kleefeld at Election Central has this response from the Romney campaign to explain his posing with the Obama/Osama picture:

Election Central contacted Romney spokesman Kevin Madden for comment, asking if it was appropriate for the candidate to hold the sign up with the woman. "The governor stopped briefly for a picture with a supporter who just happened to be holding their own sign with an alliterative play on words," Madden said, via e-mail. "I don’t think it was equating or comparing anyone."

Just a little alliterative play on words. Kind of like "macaca" was just some funny-sounding made-up word George Allen heard somewhere.