I believe the theory is that his mother was denied flight back to Hawaii because she was too pregnant, and he was therefore born while in Kenya to one Kenyan parent and one American parent. And since his mother was under a certain age at the time (can't remember what the age is supposed to be), his father's nationality is the one that counts.
Yeah, kind of far-fetched. A Hawaiian birth certificate would clear it up, but to the best of my knowledge, no one has come forward with one.
Maybe there are schools of thought stating that Obama isn't a citizen because he was born in Hawaii, but the argument presented (sloppily and hap-hazardly) above is the only one I've heard.
And... that thing about North Carolina... makes me sad to be an American.