The main reason companies do internal interviews is protect themselves from discrimination law suits.
If they apply their hiring process to everyone--inside and outside the company--they can claim they treated everyone fairly. Also, many companies have a policy of interviewing all internal candidates as a courtesy to them, even if they aren't qualified.
All you can do is prepare for your interview just like you would for a job outside the company. Put your best foot forward and let the chips fall where they may.
If for some reason someone else gets the job, it's perfectly ok to approach your boss and ask him in what ways you fell short. You may not like the feedback, but it could help you prepare for future opportunities.