It is looking more and more like a realistic scenario. If Olmert resigns Peres very well could be the choice of Kadima to replace him for a number of reasons.
1. He can keep the coalition together and avoid elections (if there are elections Kadima will collapse). Shas likes him and Labor likes him and therefore he would be able to keep the coalition together.
2. Given his age he is not a threat for the next election. The would be Prime Minister's in Kadima would have time to get ready for the primaries and next election.
I am very much against this and hope that there are new elections. According to the polls, if there are elections:
Likud - around 30 seats
Kadima - led by Livni or Peres 20
Labor - led by Ami Ayalon or Barak 20
For all his faults Netanyahu would be a much better PM then any of the above (Peres, Livni, Ayalon, Barak).