I want to withdraw money from 401k to pay off some credit card debt I am 32 years old- will if I take the 10% penalty and 20 percent for taxes how will this effect me when I do taxes for 2008?

This is NOT a good idea. The cost of removing this money (assuming your plan allows it) would be much greater than the interest you are paying.

Its NOT 20% for taxes, its 20% WITHHOLDING towards taxes. The amount of the wqithdrawal is added to your taxable income for the year which could move you into a higher bracket. The 10% is paid off the top.

Does your plan have a loan provision?