Are you reading the archaeology jobs wiki? I recommend it, if you're on the academic market. We archaeologist seem a bit reticent about sharing too many details. Personally, I don't have a problem with saying who is on the short-list for a particular job. After all, they're giving public presentations! But, I understand the wish for privacy.
There are many comments on the wiki about inside candidates. Many potential applicants are concerned by visiting scholars or adjuncts already affiliated with the hiring department. In some cases, these concerns are particularly strong because the supposed inside candidate is a spouse of an existing faculty member, or the person was hired for the visiting position the year before under almost the same job description.
I think we over-estimate the "problem" of inside candidates. I've applied for a lot of jobs, heard about the inside machinations of job searches at many other institutions, and participated in search committees myself. Here are some of the actual situations I've seen (or heard about from credible sources):
1) The adjunct spouse appears to fit the job description, but there was never any intention of hiring him/her. The thought had never occurred to the search committee, or the spouse in question has some other part-time job that they wish to keep.
2) The visiting scholar who was hired last year (under basically the same job description) was hired out of an applicant pool of 12. The tenure-track job attracts an applicant pool of 120.
3) The visiting scholar received a job offer from another institution before their current institution can offer them a tenure-track job.
4) The visiting scholar managed to piss off the whole department within the first two weeks of her new job. She fits the job description, but wouldn't be hired in a million years.
5) The visiting scholar was hired because he was the protegee of the department chair. But, the department chair is hated by the rest of the department, so when it comes to a formal search for a tenure-track job, with a search committee and vote by the whole faculty, the visiting scholar doesn't stand a snowball's chance in hell. Everyone will vote against the department chair's choice, just out of spite.
6) The committee that hired the visiting scholar had one member with a strong interest in hiring a faculty member who could teach in the Environmental Sciences program. That person is on sabbatical the next year, and when the tenure-track search committee is formed, he is replaced by someone who is passionate about hiring a faculty member who can teach in the Asian Studies program. The visiting scholar works in the Amazon, and is therefore screwed.
7) The department would never hire an adjunct from their own program. They think all the good candidates should be able to get tenure-track jobs right out of graduate school, and they're not interested in anyone else.
8) The department would never hire a faculty member's spouse. They think that any good archaeologists should have been able to get his or her own job, and if that person was unwilling to live 2,000 miles away from their 3 kids, that just shows they lack serious interest in their career.
I could go on, but you get the point. For heaven's sake, apply for the job, regardless of whether you think there's an inside candidate!