Michigan would be a 2 seed, ahead of osu, by virtue of the 2nd tie-break rule. First is head to head (split), 2nd is record against top team in the regular season standings (msu), against which UM is 1-1, while osu is currently 0-1. Similarly, Illinois gets the nod over Minnesota for the 9th seed due to their crazy win against msu.
Michigan would potentially have to play Northwestern again, which would be no cakewalk. Then again, seeds 5-7 are all tough outs, and we've seen that even Iowa is capable of winning a game or two.
Overall, regardless of how the final bracket shakes out, I'd say Michigan has a great shot at getting to the semifinals, and pretty decent odds at making the championship game. Click the image for a bigger version.