On-air he's never been that funny. It's remarkable that with all the talent out there he got this gig in the first place, which then supposdely qualifies him for the tonight show.
You're wrong as hell. Conan is pretty f*cking hilarious. Maybe you just don't vibe with his humor, but millions of others do, especially college kids who can afford to be up late watching tv. In my eyes, this is recompense for Letterman being screwed out of the Tonight Show, while Jay "The Unfunniest Comedian Ever" Leno dicked him over.
Norm Macdonald did a funny bit on Conan last week, saying that once every 10 years, some idiot gets screwed by Leno, and Conan is now that idiot (referring to the new "Jay Leno Show" that'll be taking over NBC's 10pm slot when Conan takes over).