Yes, they will be in the title game if they win out. That is almost for certain. Penn St won't go undefeated, and neither will Bama. Texas might not either.
And please, the guy that said "no shit teams in the title game" needs to get a clue. USC has by far the most talented team in the country. I am willing to bet they'd be favored by a TD over almost any team in the country (if not every team), and certainly over Alabama and Penn St. They would likely be double digit favorites over both those teams.
What will really piss people off is if USC loses a game and Ohio St wins out. That could likely land them in the title game. I would love to see the boards explode if Ohio St is in the title game again this year.