This is a rush transcript from "On the Record ," September 26, 2008. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: One down, two to go. Weeks of tension exploded moments ago here in Mississippi when Senator Obama and Senator McCain met face to face for the first of three debates.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN: I had a town hall meeting in Wolfeboro, New Hampshire, and a woman stood up and s aid senator McCain, I want you to do me the honor of wearing a bracelet with my son's name on it. He was 22 years old and he was killed in combat outside of Baghdad. Matthew Stanley. Before Christmas last year. This was August a year ago. And I said I will wear his bracelet with honor.

SEN. BARACK OBAMA: I've got a bracelet, too, from Sergeant - from the mother of Sergeant Ryan David Jopec (ph) given to me in Green Bay and she asked me can you please make sure another mother doesn't go through what I am going through.

(END VIDEO CLIP)

VAN SUSTEREN: Frank Luntz watched this debate but he was not alone. He was with 30 undecided voters. Who did the voters think won this battle?

Joining us live is Frank Luntz, the author of the book, "Words That Work." Well, Frank, what happened?

FRANK LUNTZ, POLLSTER: It was great. Barack Obama got an early start. John McCain came back when he started talking about accountability in spending. But Obama seemed to have won the debate according to our people.

Now before we get to that sound. There are two clips I wanted to show you. We used our parented instant response dials. The red line represent Republicans and the blue line represents Democrats. The higher the line climbs, the more favorable the response, Barack Obama, one of his high points is when he talked about CEOs getting golden parachutes in his solution to the economic crisis. Let's take a look.

(BEGIN VIDEO CLIP)

OBAMA: We have to make sure that none of that money is going to pad CEO bank accounts or to promote golden parachutes shootouts. Number four, we have to make sure we are helping home owners because the root problem has to do with the foreclosures that are taking place across the country.

(END VIDEO CLIP)

LUNTZ: The reason why Obama did so well is because he hit the two pairs, he talked about beating up on CEOs, quite frankly, and he also talked about protecting homeowners. Now the Republicans, John McCain also had a good response when he talked about fighting wasteful Washington spending and in particular earmarks. Let's see one of John McCain's best reactions to the debate.

(BEGIN VIDEO CLIP)

MCCAIN: It is completely out of control. It has gone -- we have now presided over the largest increase in the size of government since the Great Society. We Republicans came to power to change government, and government changed us.

(END VIDEO CLIP)

Watch Greta's interview with Frank Luntz

LUNTZ: Very powerful line, very effective. But in the end, of our 27 people, 17 moved towards Obama, and only 10 moved towards McCain. Just to give you some context, they were dead even questioned between John Kerry and George Bush back in 2004, a perfect group, mostly independents, all undecided.

We do have some great focus group sound for you.

I asked them a simple question when the debate was over. What really surprised you the most, don't tell me what you thought you were going to see. Tell me what surprised you. And here's what they had to say.

(BEGIN VIDEO CLIP)

LUNTZ: We watched the debate for 90 minutes. What surprised you the most about what you saw?

UNIDENTIFIED FEMALE: That McCain seemed so old and tired.

UNIDENTIFIED MALE: I am absolutely amazed how much he looked like George Bush with all the hand motions and the sound bites coming out.

LUNTZ: What surprised you the most?

UNIDENTIFIED FEMALE: Obama kept calling McCain John, and yet John McCain only addressed him Obama.

UNIDENTIFIED MALE: When he got his name right.

UNIDENTIFIED FEMALE: When he got his name right, yes.

LUNTZ: What surprised you the most?

UNIDENTIFIED MALE: Both candidates were very lethargic. I think John left his pit bull at home.

LUNTZ: Really, what surprised you the most.

UNIDENTIFIED MALE: First I am surprised we had a debate at all. The issue of the day was the economy, and yet John McCain came rushing to the debate and didn't make an .

(END VIDEO CLIP)

LUNTZ: And what I thought really interesting, and we have held the tape and haven't talked about this, is almost everyone thought John McCain was playing politics rather than principle when he said he wasn't going to come to tonight's debate. Clearly it has not been a good week for McCain. He did good in tonight's debate but our swing voters thought that Barack Obama did a little bit better.

VAN SUSTEREN: Let's talk about the so-called swing voters, they are all from the State of Nevada or do you have some from other states?

LUNTZ: They are all from Nevada. The reason we came to Nevada is it is absolutely dead even. Every poll has had either Obama or McCain winning by only a percent or two. Nevada George Bush won in 2004 by just one percent. Some people think the five electoral votes Nevada has will determine who wins the presidency.

VAN SUSTEREN: And how did you find these 30 people?

LUNTZ: We did it through telephone calls, we did it through Internet interviews. I will tell you something , Greta. We threw out a lot of people also. Because an undecided voter has to be someone who would consider voting for either McCain or Obama. What we found and this is one of the problems with the surveys that we're seeing out there is that people will say I am undecided, but there's no way I am voting for John McCain. Or I am definitely not voting for Barack Obama. Let me tell you something, that is not an undecided voter.

These people here, we did it here at Polo Towers, part of Diamond Resorts. I need to think them for letting us use their facilities. They came here truly excited about the debate and they left even more excited about the election.

VAN SUSTEREN: Frank, thank you.


Content and Programming Copyright 2008 FOX News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2008 ASC LLC (www.ascllc.net), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon FOX News Network, LLC'S and ASC LLC's copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.