Well, maybe I'm missing something, but we already have a large betting market on future oil prices...and it's helpfully called the "oil futures market". It suggests a price in the region of $60 by the end of 2009 (eg here, I don't really know where the best info is).
Therefore, anyone who thinks that the future oil price will be actually higher than that, can buy a future delivery of oil at that price. They don't need to actually be prepared to take a physical delivery of oil, they can simply sell the future contract nearer the date.
So, it seems to me that the person who bet on an oil price of over $200 was rather silly, because they could have got a much more profitable and lower-risk deal from the existing market. And that's before we even start with put and call options which could probably leverage a very large return on a small investment. If anyone else wants to place such a bet, please let me know - I will take willingly you on, hedge on the existing market and make a large risk-free profit.
A rather more attractive oil bet (from the "alarmist" point of view) can be found here. A drop to $25 by 2010 seems pretty unlikely right now.
Ok, I found some futures and options data here. It looks like you can buy a "call option" for Dec 2010 oil at $70, for a price of say $4 (assuming I'm not misreading the site - it is not entirely clear to me). That $4 gives the owner the right (but not the obligation) to buy oil at the stated price and date. So if the oil price is $100 at that time, that nets a profit of $26 on a stake of $4. At $200, the return is $126. I'm sure that Matthew Simmons (who took the high side of the $200 oil bet) knows all this, so I conclude that he is giving away $5000 as a publicity stunt to push sales of his new book. Or maybe he's just trying to prove that doomsayers are stupid.
Anyway, I have no book to promote - yet :-)