Real are playing very poorly this season simply because they have no continuity in the managers chair, I don't know how many they have gotten through in the last few seasons. As a result of this they blow hot and cold in their games - the two games vs Zaragoza were a perfect microcosm of their past two seasons. Real, in my opinion could go to Arsenal (themselves struggling for form) and stuff them just as easily as they could get mauled! It'll be a good tie with two teams who like to play flowing attacking football.
Henry, I think, will leave Arsenal during the summer - well he will if he's as ambitious as he says he is. The only things keeping him at the Arse are his loyalty to Arsene Wenger (who showed faith in him and turned him into the player he is now), the French contingent at Arsenal and his captaincy. There's no doubt he loves the club, but as the man says himself, he has to be sure that the clubs sporting ambitions match his own before he signs a new contract (his current one expires in '07 - when he can leave for nothing, dont think the Arsenal moneymen aren't thinking about that with Ashburton Grove to pay for). He's got maybe 3 years left at his current level and unlike the other "greatest ever" players around at the moment (Zidane, Ronaldinho, Roy Keane, Ronaldo) Henry has never produced the goods at the highest (World Cup/Champions League) level so perhaps it is the natural course of things for him to move on and make the final progression in his career.
PS - the Arsenal -v- Liverpool game was painful. A terrible terrible game. Henry spent most of the match pouting, pointing and shaking his head - an inspirational captain!!