1. He ran as a celebrity against two very gray, career politicians.
2. He ran as an anti-tax candidate who was libertarian on social issues.
The result is that he got votes from disaffected Democrats and Independents leery of either party, while Republicans, save for some RINOS, stuck with Coleman (who, by the way, is not exactly what most here would consider a true conservative). Ventura also brought in a lot of new voters who, energized by his no tax rhetoric, ended up voting Republican on the down ticket races. The real payoff didn't come until 2002 when people who wouldn't have considered voting Republican in 1998 were finally comfortable enough to make that move. And why did they make that move? Because they'd had four years of a Republican House and liked what they'd seen.
The point is that California, politically, is where Minnesota was 10-20 years ago. To win swing voters and build a winning majority takes time. Here in Minnesota it took eight years of a liberal Republican Governor, followed by four years of an (essentially) Democrat Governor and a Republican House, before we conservatives were able to earn a shot at real political control.
I'm not sure what to think of Arnold, but parallels to Ventura are clear. If he provides a foot in the door to a unified California Republican party and a more conservative state government, then he will be a good thing. Arnold is not the be-all and end-all, but he may be a step towards a future Republican/Conservative majority in California.
Incrementalism works. I've seen it firsthand here in Minnesota.