First, Fox News is far, far more populist than it is conservative. Also, I think most of you have confused with the editorial portion of the network with the news portion. Brit Hume is an excellent journalist, or at least ABC thought so.

Fox is popular for the same reason Cops, Jerry Springer, Nancy Grace, and other gossip shows are. They are sensationalist shows and their viewers love to see others worse off than they are. A pretty cancerous and cyclical cycle to embroil oneself in. Sponsors go where the viewers are, they could care less about realism or quality.
If I want the facts, and I do, I read The Economist. Television is infotainment and I remember to take it as such. I have my favorite tv programs and a few fictional ones I really like, but I don't attach my ego or personal beliefs to them as strongly as some may suggest.