I think he's still alive. He's had years and millions of dollars to plan for an "exit strategy".He's probably hiding in a deep cave just across the Pakistani border.
I think the US Embassy bombings in '98 drove the CIA to keep close tabs on him for good. They probably had him down to a few square miles by September 11. It was only a matter of having the CIA operatives narrow his position before bombing the bastards straight to hell.
Did we have CIA operatives in the midst of Osama? Well, Ex-American John Walker was able to assimilate into the network, and was found just recently. Who knows, perhaps there are others in there, too, on our side.
I know, I know, I'll put on my tin-foil hat and argue that John Walker IS a CIA operative.