Not sure how we feel about computer rankings, but the Colley Matrix (here) has Michigan at #1. This ranking method only consider wins and losses and the win/loss records of opponents (and their opponents, etc., etc.). See here for Wesley Colley's (the rankings creator) comments on his methodology and it's benefits. Colley states:
[The rankings are] absolutely free from human influence or opinion, [account] for schedule strength, [ignore] runaway scores, and yet [produce] common sense results, which at the end of the season compare very favorably with human rankings (and other computer rankings). What else do you want?
Well, for one thing, Michigan to be at #1 at the end of the season...
As a final aside, kudos to all our opponents to date... apparently they aren't as weak (ok, except for Rutgers, Colley agrees they suck) as might have been thought before the season started... Colley has our SOS as 10th overall.