Let me be clear: I despise the Clintons. I can excuse the race-baiting strategy of Hillary's '08 campaign as part of a legitimate effort to win at all costs, and while I find her incompetent - from the health-care and fundraising debacles during Bill's administration to the blindly overconfident manner in which ran her campaign (whose pig-headed "stay-the-course" strategy brings uncomfortable comparisons with our current President's leadership style) - my distaste for the Clintons focuses almost entirely on Bill. I don't hate Bill Clinton because of the right-wing mudslinging on his sexual mores or his own sleazy relationship with the truth, but because of what he failed to do while in office: this was a President with the cowardice to ignore genocide in Bosnia, to actively attempt to hide even worse genocide in Rwanda, who forced our military to engage in lies with "don't ask-don't tell" rather than have the bravery to end that bigotry outright, and then institutionalized that bigotry with the Defense of Marriage Act, who back-stabbed the industrial middle class with NAFTA, and worst of all, became the leading example of the DLC philosophy (pro-corporate, anti-progressive) that betrayed everything the Democratic Party has stood for since FDR brought us a New Deal. While Clinton-lovers deify him for leading the party out of the wilderness of losers like Dukakis, Mondale, and Carter, Clinton the DINO did much more to harm the party in the past few decades than anything else, damage that can only now be healed by the truly progressive values and populist strategy of Barack Obama.
That said, I think there is a very strong case for Obama to take Hillary as his running mate. It has nothing to do with what I think Hillary adds to an Obama Administration, nor what she could do to bring her supporters in-line with Obama's presidential bid. The current polls as they stand show that Obama can beat McCain, narrowly but at a time when the Clinton backlash is at its strongest. Those numbers can only get better for Obama as he nears the convention, so I don't find a lot of legitimacy in the idea that Obama somehow needs Hillary to win this. However, Hillary can do a great deal of damage to torpedo Obama's chances in November, and indeed, considering her age and better chance to win in 2012 than in 2016, it may be in her interests to see Obama lose. That is the most compelling reason for Obama to make her his nominee: Hillary as Veep would mean that if Obama loses so does Hillary, in such an open and irrevocable manner that even Hillary (and Bill) would understand that she can't safely torpedo Obama without sinking her own chances to win at a later date. Keeping her within the campaign would also mean keeping an eye on her and Bill, so that they can be kept on message. It follows the basic philosophy of keeping your friends close but your enemies closer.
My only concern is how much this might alienate some Obama supporters, particularly among Independents and Republicans. The charge that Hillary will dilute Obama's "change" message by allying him with such Washington old guard as the Clintons has little weight when we look at the alternatives: with the exceptions of Kathleen Sebelius, Janet Napolitano, and Claire McCaskill, every other potential Obama Veep is an old white male whose going to dilute the "change" image just as much (if not more) than Hillary. As for those three, Napolitano is probably a lesbian (I dearly wish my bigoted country were ready for that, but I'm afraid they aren't... yet), McCaskill would be fantastic but she's a serving Senator in a seat the Democrats can't yet afford to lose, and Sebelius would be nearly 68 when she runs for her own presidential seat in 2016 following a successful two-term Obama administration. Honestly, I would still be very happy with Sebelius, but I don't think her advantages outweigh the opportunity to keep the Clintons in the fold and unable to make as much mischief.
And there is still this: if Obama takes Hillary as his veep and wins the Presidency, she is most likely to want to spearhead the administration's universal health care proposal. Hillary's current plan has zero chance of getting through even a Democratic-controlled Congress, and all evidence points to her inability to create bipartisan compromise. So I believe that if Obama gave her enough rope to hang herself with this, she'd do so, her health-care proposal would go up in flames, laying the groundwork for Obama to step in and get his more reasonable plan passed. This would also give Obama the excuse to ask her to step aside in 2012, allowing him to almost bloodlessly replace Clinton with a second Veep during his second term, perhaps Sebelius or (my hope) someone from his same generation that could maintain the youthful vigor and progressive values he is bringing back into the party.