UPDATE: The Obama Campaign responds:
The New Yorker may think, as one of their staff explained to us, that their cover is a satirical lampoon of the caricature Senator Obama’s right-wing critics have tried to create. But most readers will see it as tasteless and offensive. And we agree.”
And the New Yorker cartoonist:
I think the idea that the Obamas are branded as unpatriotic [let alone as terrorists] in certain sectors is preposterous. It seemed to me that depicting the concept would show it as the fear-mongering ridiculousness that it is.
Sounds like this guy went to the Randell Beck school of satire.