That's not what Cheney said. He said he has not made up his mind this early about who he is going to back, but then every single candidate would have to prove themselves for 2012 (that includes Romney, Huckabee, Pawlenty and every potential 2012 candidate). He didn't single out Sarah Palin or anyone else.
I read between the lines and that is what I took. Cheney was asked about Palin, not Romney, so although his answer applied to all, he was asked about her. I wouldn’t expect him to answer in the affirmative for anyone now, even if he was sold on them.