Halladay is actually pitching better than I've ever seen him. He leads the AL in IP by 9 despite having one less start than everyone below him. He's 4th in ERA and 2nd in WHIP. He leads the majors in K/BB by a large margin. He's also 2nd in FIP behind only Cliff Lee.
Still, it's all about wins, not who is actually the best pitcher. If Toronto's offense gets their act together, he'd be my choice for sure (I don't think Marcum can keep it up). Because of that I still really like the chances of Ervin Santana (he's having an amazing year), Chien-Ming Wang, and Josh Beckett.
As for Halladay being an injury risk, well I'm not sure. I've come to believe, especially in recent seasons, that Halladay pitches hurt a lot. He usually doesn't go on the DL even if he's having arm problems (or what the Jays call "forearm soreness") , but it seems to limit his effectiveness. So far he looks fine, so we'll just have to wait and see about that.