Bad initial reception, people didn't like her lost girl act and the fact that she's already released an album under a different name (the horror), iirc Leona Lewis had released an album before XF. Well the XF fans didn't like it, the average viewer doesn't know or doesn't care imo.
She's an accomplished singer songwriter - Indie Rock, R&B. I think she's great (without the stunning looks to attact female jealousy), although I'm in a minority atm.
Rumours that she's through although imo that was always her destiny. I think Cowell wanted her to be in XF to give her the exposure from the live shows and maybe a shot at winning: http://www.anorak.co.uk/256750/tv/how-the-x-factor-and-sony-bmg-fixed-it-for-katie-waissel-aka-katie-vogel.html
I've don't know how she'll do after the final 12 but I got on at 26 and 21, where she still is in a few places.