Given Chirac's comments over the past few days, I'm kind of not surprised at this outcome. But still, Paris' bid was in many ways the best, notably because 1) Paris already has most of its facilities in place and 2) Paris has superb transportation infrastructure to bring the huge number of people expected at the Olympics (two major airports plus excellent high-speed rail connections to the rest of Europe).
Congratulations to London, anyway, and best wishes holding the Olympics in 2012! 