This is an issue that I was interested in, then excited about, and then less so. My preoccupation with it peaked when I read Larry Lessig's book Republic, Lost. In it, Lessig details the extent to which money influences policy and presents an alternative system of campaign financing. I highly recommend the book, although if you would prefer to watch a video, this YouTube clip (48 minutes) covers much of what is in the book. Lessig more recently published an e-book, Lesterland, which presents the same basic point more briefly, and he gave a TED talk on it in a few months ago.
Lessig seems to be focused on spreading information and generating enthusiasm for changing the system. I'm still totally on board with the kinds of reforms he is suggesting. I have to wonder, though, how much of an improvement it would really be. Even if we create a system that forces politicians to cater to large numbers of voters, we can't expect that all the best policy decisions will be made. Voters don't generally have incentive to become informed, and they tend not to very good at processing what information they do receive. To take just one example, consider how difficult it is to convince the general public of the dangers of global warming. Uncertainties and biases can be exploited, especially by those with abundant resources at their disposal. It may not be as easy to influence voters through informational campaigns as it is to influence politicians through campaign donations; but surely it would happen to some extent. Even if no one actively tries to manipulate voters, how will they arrive at their voting decisions? I would feel fairly confident that our system of governance would improve if we dramatically reformed campaign financing, but I would still be looking out for some nutty policies to emerge.