On the face of it, Tsvangirai would appear strongly placed to win a fair election with support from Simba Makoni, the third placed presidential candidate.
But human rights groups, Western countries and the MDC all accuse Mugabe of launching a campaign of violence and intimidation in an attempt to swing the second round in his favour.
What will happen if Mugabe stays in power?
Analysts say there would be little prospect of serious political change and that Zimbabwe's economic crisis is likely to deepen.
Western sanctions, that have hurt the country but failed to weaken Mugabe, would is likely to continue.
What about the MDC's parliamentary win?
Mugabe's loss of parliament would make governing more difficult for a Zanu-PF cabinet because the passage of legislation would depend on co-operation from the opposition.
But, through presidential appointees, Mugabe's Zanu-PF would still have control of Zimbabwe's Senate, parliament's upper house.
This would mean they could block legislation from the lower house and, despite their enlarged presence, the MDC would still not have the two-thirds majority needed to impeach the president or change Zimbabwe's constitution.
What if Tsvangirai becomes president?
Analysts say the end of Mugabe's rule would likely bring badly needed international aid and some of the estimated three million Zimbabweans - many of them skilled workers - who have fled their country could return home.
The US has said Zimbabweans can expect an economic package worth billions of dollars if a new democratic government that embraces free market values is formed.
Tsvangirai has spoken in broad terms about creating conditions for foreign investment worth $10bn, though he has not spelled out how he would ease Zimbabwe's economic crisis, marked by severe shortages of basic goods and the world's highest inflation rate.
Tsvangirai would also likely reverse a nationalisation law, implemented by Mugabe, that analysts have warned could deepen the economic crisis.
What happens if the stalemate continues?
Some warn Zimbabwe could slip into the kind of violence that hit Kenya after disputed elections in December last year, although Mugabe's security forces are likely to quickly crack down on any unrest.
There has also been talk of a possible national unity government as a way out of the crisis, though both sides are likely to insist on leading such an administration.