I think there are several reasons why Palpatine would want the Republic to prevail, rather than the CIS. One is that the Republic has a pre-existing bureaucracy in place to control the galaxy. It is much easier to phase this out in favor a more direct method (grand moffs, moffs, etc). Another is that he wanted the popular support of the people. If he gains control of the Republic by force (CIS victory), then the galaxy will be a conquered people, who are more likely to lash out in rebellion. By thwarting the enemy (Republic victory), he becomes a hero, and the general populace actually want him to rule the galaxy.
Yeah, you'd think the Emperor had come back to life or something.