Though Ron Paul's fifth place showing in Iowa was lower than some had hoped, there is actually some good news to be gleaned from his vote total for his future performance in New Hampshire and elsewhere.
Average polling data indicated that Ron Paul had risen to 7.6% in polls by January 2nd. With his 10% showing at the Iowa caucus, he showed that he could bring out at least a third more voters to the booths than polls indicated. Common sense says that polling will never be perfect, but on the other hand it may be true that polling really does exclude Ron Paul support because they're young, never voted before, or do not use land lines. If this pattern holds, Ron Paul will always do better than what's reported by traditional polling methods.
There are also certain elements of the Iowa population where Ron Paul trounced the competition. According to MSNBC's exit polling, Dr. Paul dominated among independents who voted Republican with 29% of the vote, and with voters who described themselves as angry with the Bush administration he scored a whopping 54%. Since New Hampshire expresses both of those demographics strongly, and plays host to the libertarian-oriented Free State Project, he stands a good chance of placing highly and even winning that state.
Another interesting fact is that Ron Paul was one of only three candidates to place first in an Iowa County (the other two being Mike Huckabee and Mitt Romney of course). This happened to be Jefferson County, Iowa. If anybody knows what makes Jefferson County special, please let me know. This is definitely good news that the campaign is able to target locations where he's popular and draw out the voters. You can view how Republicans placed by county, here.Update: here are some more predictions on Ron Paul and other Republican candidates, as well as the number of delegates assigned per candidate.