I tried to cut it down to a readable size, and highlighted a couple of interesting points:
http://en.wikipedia.org/wiki/Iowa_caucus
"The Iowa caucus is an electoral event in which residents of the U.S. state of Iowa elect delegates to the county convention to which their precinct belongs in a caucus. There are 99 counties in Iowa and thus 99 conventions. These county conventions then select delegates for both Iowa's Congressional District Convention and the State Convention, which eventually choose the delegates for the presidential nominating conventions (the national conventions).
The Iowa caucus is noteworthy for the amount of media attention it receives during U.S. presidential election years: Since 1972, the Iowa caucus has been the first major electoral event of the nominating process for President of the United States. Although only about one percent of the nation's delegates are chosen by the Iowa state convention, the initial caucus has served as an early indication of which candidates for President might win the nomination of their political party at that party's national convention.
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In 1980 Republicans began the tradition of holding a straw poll at their caucuses, giving the appearance of a primary election. George H. W. Bush campaigned extensively in Iowa, defeating Ronald Reagan, but ultimately failed to win the nomination.
While they have been a financial boon to the state, the political value of the Iowa caucuses has gone up and down over the years. In 1988, for example, the candidates who eventually won the nominations of both parties came in third in Iowa. In elections without a sitting President or Vice President, the Iowa winner has gone on to the nomination only about half the time (see below).
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The caucuses are closely followed by the media and can be an important factor in determining who remains in the race and who drops out. However, the only non-incumbent candidate to win his party's caucus and go on to win the general election was George W. Bush in 2000. Neither Reagan nor Clinton won prior to their first terms. No incumbent President has run opposed in his own party's caucus since Jimmy Carter in 1980.
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Process
The Iowa caucus operates very differently from the more common primary election used by most other states (see U.S. presidential primary). The caucus is generally defined as a "gathering of neighbors." Rather than going to polls and casting ballots, Iowans gather at a set location in each of Iowa's 1784 precincts. Typically, these meetings occur in schools, churches, or public libraries. The caucuses are held every two years, but the ones that receive national attention are the presidential preference caucuses held every four years. In addition to the voting and the presidential preference choices, caucus-goers begin the process of writing their parties’ platforms by introducing resolutions.[1]
Unlike the first-in-the-nation New Hampshire primary, the Iowa caucus does not result directly in national delegates for each candidate. Instead, caucus-goers elect delegates to county conventions, who elect delegates to district and state conventions where the national convention delegates are selected.[citation needed]
The Republicans and Democrats each hold their own set of caucuses subject to their own particular rules that change from time to time. Participants in each party's caucuses must be registered with that party. Participants can change their registration at the caucus location. Additionally, 17-year-olds can participate, as long as they will be 18 years old by the date of the general election.
Observers are allowed to attend, as long as they do not become actively involved in the debate and voting process. For example, members of the media and campaign staff and volunteers attend many of the precinct caucuses. Youth who will not be eligible to vote by the date of the general election may also attend as observers and may volunteer to attend the county convention as youth delegates.[2]
Republican Party process
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In the Republican caucuses, each voter casts his or her vote by secret ballot. Voters are presented blank sheets of paper with no candidate names on them. After listening to some campaigning for each candidate by caucus participants, they write their choices down and the Republican Party of Iowa tabulates the results at each precinct and transmits them to the media.[3]
The non-binding results are tabulated and reported to the state party which releases the results to the media. Delegates from the precinct caucuses go on to the County Convention, which chooses delegates to the District Convention, which in turn selects delegates to the State Convention. Thus it is the Republican State Convention, not the precinct caucuses, which select the ultimate delegates to the Republican National Convention in Iowa."