So you are quick to judge whole party as is today by action of three members eight years ago? I'm not refuting their historical connection to neo-nazis or far-right, but according to a projected vote share, they either changed enough or Swedes are really desperate.
The way I see it, the Sweden Democrats are like the Front National in France or the BNP in the UK - they have realised (some time ago) that the best way to achieve their aims is to form a mainstream political party, and that means adopting language, behaviour and policies that appeal to a wider audience. The suspicion is, however, that it is largely a ruse to gain power and that they are still as xenophobic, racist and fascist as before, they have just learned to tone down their language and behaviour enough to make their policies more palatable.
I reckon that Sweden's liberal values and culture have created a dilemma that is similar to the moral dilemma facing the EU on a much larger scale. Sweden has, to its credit, stepped up to the immense challenge of how to humanely treat hundreds of thousands of desperate and destitute people - but the practical realities of their laudable actions are starting to hit home. Sweden is starting to discover that 'integration' doesn't necessarily mean that newcomers 'become Swedish' (though that was probably the original idea), but that it also runs the risk of Swedish values and culture changing as a result of an increasingly diverse population, mainly as a result of its liberal immigration policies. Unfortunately, the mainstream parties have been too slow to realise that many people in Sweden are extremely worried about this, and handed the Sweden Democrats their signature policy. Unfortunately, an anti-immigration stance and right-wing politics go hand in hand, and while there are some serious concerns about immigration, right-wing parties are always going to benefit.
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Current polls have the election as too close to call between the centre-left bloc and the centre-right bloc, but the Sweden Democrats are polling at anything between 16-25%. It is possible, however unlikely, that the SD may well win the largest vote share of any one political party, however no-one from the centre-left or centre-right bloc wants to form a coalition with them - but it would be a significant landmark if they do manage to win the largest vote share, even if it won't allow them to govern. I don't know what the situation is in Sweden, but I believe in the UK that the party with the largest vote share get first crack at forming a coalition, so things could get interesting if the SD do better than expected.
That said, even a vote share between 16-20% would send a strong message about the political price of liberal immigration policies - if Sweden, arguably one of the most liberal and progressive countries in the world can vote 1 in 5 for a far-right anti-immigration policy, then the EU's hopes of a grand deal would be left in tatters.