This is probably going to get moved into the NBA Thread, but while it's here, as a Bobcats fan, I'll answer.
They are playing over their head, but only slightly. They are not utterly devoid of talent like last year would have you believe. Last season was an anomaly, caused by a young team playing in a shortened season, injuries, and an apathetic coach with one foot out the door into retirement.
This season, acquiring Sessions and Gordon was exactly what the team needed. Two veteran leaders coming off the bench to ensure that the second unit does not come unglued. Their presence has already been felt, as the Cats have won a couple of games in OT and a couple more in the 4th quarter, which they never did last year.
They are young and raw, but the talent is there. MKG, Sessions, Jeff Taylor, Mullens, and first and foremost Kemba are all very solid players who have the potential to become even more solid. Mike Dunlap has been an excellent coach, and has coach of the year potential. While it's obvious that the Bobcats won't be competing for a championship this season, I would not be shocked in the slightest if they got the 8-seed. I think that they are comparably or only slightly less talented than the following teams:
Toronto
Detroit
Milwaukee
Philadelphia
Cleveland
Atlanta
And they are outright better than:
Washington
Orlando