I theorize that Columbia's left wing landing gear door opened prematurely, as the orbiter was crossing the California Pacific coast.
Columbia crossed California's Pacific coastline at 8:53 am EST. At this instant, several sensors in the left wing went dead. This was the first occurrence of a significant, anomalous thermal event. Over the next five minutes, landing gear strut actuator temperature measurements (in the left wheel well) rose significantly above normal, 20 to 30 degrees. Payload bay temperatures and temperatures on the right wing remained within normal bounds.
This coincides with the observations by Caltech radio astronomer Anthony Beasley, who was watching the shuttle pass overhead with his family. At 5:53 PST (8:53 EST), he was watching the shuttle pass from horizon to horizon, when he saw a bright piece separate. "It was like it dropped a flare, and kept going," he said. This was the first visual observation of debris from Columbia separating from the main orbiter. In addition, photographer Gene Blevins (also at Caltech) took photos of the shuttle that appear to show an early trail of debris. See at left for a sample - note the similarity to the images captured by WFAA in Dallas later on.
Also note that - according to this reference site- the thermal load on the shuttle is maximum about 20 minutes before landing. According to SpaceFlightNow's timeline, the scheduled landing time was 9:16am EST, meaning that the Shuttle was near or at maximum thermal load just as it crossed over California.
I theorize that the debris seen here was the door of the left wheel well, and possibly some heat tiles. This would account for the visual observations and the initial loss of sensor data. Also, the resulting hole would be a gap in the heat shield, allowing temperatures to rise in the localized section of the wheel well.
At 8:58 am ESTover New Mexico, the roll trim in the elevons started to increase, indicating an increase in drag on the left side of the vehicle.. Also, the left main landing gear tire pressure and wheel temperature measurements were lost, though NASA is certain this was due to sensor failure and not physical loss of the tires themselves, because the measurements were staggered.
I theorize that at this point, heat and stress damage caused the tire sensors to give out. The hole left by the missing flap would account for the increased drag. If so, the tire itself was probaby lost shortly after the sensors went dead.
At 8:59 am EST, the shuttle entered Texas airspace. There was further increase in the roll trim indicated by elevon motion, suggesting that the orbiter was trying to compensate for increased drag on the left side by rolling to the right. 
I theorize that the increasing drag was caused by more physical damage - possibly the entire landing strut as well. The roll maneuver was automated and may have contributed to the breakup, since the drag experienced by missing hardware likely exceeded the tolerance that the automatic system was designed for. Thermal and aerodynamic stress forces were probably severe enough at this point, that the shuttle simply could not withstand further.
At 9:01 am EST, Houston lost contact with the Shuttle for the first time.
at 9:04 am EST, the first visual reports of debris behind the shuttle in texas started to come in.
Unlike most of the theories floated so far, I do not believe the breakup was caused by loss of thermal tiles. During the press interview, Dittemore said:
"We certainly know the wheel well area is one of our sensitive areas thermally. We've analyzed that area intensively in the past and the loss of any one single tile we believe would not be a cause for loss of a vehicle. In fact, we believe we can lose a tile in different locations and all by themselves we don't believe that would represent loss of vehicle. It may represent some structural damage, but not loss of a vehicle."
I'm sure there are severe holes in this theory... thats what comments are for.
UPDATE: These are links to NASA's website detailing the details of the de-orbit maneuver, and some specific information relating to the landing gear doors. Unfortunately, the servers seem to be down. When they come online I'll look through them and try to update the post as relevant.
 Spaceflight now mission statuspage timeline, http://spaceflightnow.com/shuttle/sts107/status.html
 Shuttle program manager Ronald Dittemore press interview, http://www.spaceflightnow.com/shuttle/sts107/030202investigation/
 SF Gate article, http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2003/02/03/MN33624.DTL&type=science
 NBC4 News, Los Angeles http://www.nbc4.tv/news/1951651/detail.html
 Space.edu reference, Chapter 19 http://www.space.edu/projects/book/chapter19.html