I've become quite an expert at this over the summer. Its exactly as everybody else describes - pack as much as poss inside the tent and then, finally, attack the wet tent itself....
The trickier bit is putting up a wet tent in the rain and then drying it out enough to put your stuff inside - whilst its chucking it down. I found that a cheapo washing up sponge in very useful for this.... After a few days, though, it all gets a bit much....
Paddy - Probably not fair to send the NP bloke back out under current conditions... I started my walk last Monday, so my experience is quite recent - I think the worst bit was probably the field just after Old Hall farm - going North. There's a few yards of desperate work in deep slutch - mainly the combination of a good sustained soaking, wandering cattle and CW walkers staggerring about doing windmills trying to stay upright. I don't think this is peculiar to the CW, though, it seems to be general - peat moors seem to have been specially sloppy for a few weeks now, just like they were before they paved the Pennine Way!
I expect it'll dry out once global warming kicks in...
I had some serious problems negotiating the little side streams in Langstrath after descending from Stake Pass. These weren't little side streams any more but knee-deep raging big side streams which took me all my balance and two poles to get across. I suspect that these probably subside pretty quickly, though.
I didnt have any problems around Derwent Water, or anywhere else on the path. The main problems were in the places where the path wasn't "made-up" - for instance - in the cow pastures just out of Ulverston and around the Western side of Beacon tarn. The South's cow fields were a sea of sucking shin-deep clart in places.....
If you're thinking of camping, all of the campsites except Stonethwaite were in a very poor condition - soggy, muddy and worn out. Stonethwait seemed to have quitea few nice pitches left and it was deserted when I arrived.