See the video here on Meet the Press. The key points of the interview are summarized below and taken directly from today's Washington Post.
During the recent economic crisis, Powell said, Obama had shown "steadiness, intellectual curiosity, a depth of knowledge." As for McCain, he said, "I've found that he was a little unsure as to how to deal with the economic problems that we were having, and almost every day there was a different approach to the problem. And that concerned me. I got the sense that he hasn't had a complete grasp of the economic problems that we had."
Powell said he was also concerned by McCain's choice of Alaska Gov. Sarah Palin, whom he called "a distinguished woman" but someone not ready to be president. "That raised some question in my mind as to [McCain's] judgment," he said.
In explaining his decision, Powell was more critical of the Republican Party and McCain's campaign than of the candidate himself. He said Republican attempts to tie Obama to the 1960s domestic terrorism of William Ayers amounted to "demagoguery" and a distraction from pressing issues.
Powell also said he was troubled by Republicans who "said such things as 'Well, you know that Mr. Obama is a Muslim.' Well, the correct answer is 'He is not a Muslim; he is a Christian. He's always been a Christian.' But the really right answer is 'What if he is?' "
Powell, who supports affirmative action for minorities and abortion rights, has also expressed concern about McCain's positions on domestic social issues. "I would have difficulty with two more conservative appointments to the Supreme Court," he said.