Second, it is perfect.  A lot of people see Hillary as the anti-Obama, which is funny as hell really considering the bang up job she does serving her President and her country right now :)  But I suppose this could make a big difference in 2016 to those who will be completely fed up with Obama and his lack of bold moves when he had the capital to spend and the political will to do.

First, the Democratic party - and by "party" I mean the heads of the DNC, DSCC and DCCC - has to decide which Democratic party it is, whether the party it became is the one it wants to be, and, if fewer people buy what it is selling this November, whether it can be successful selling it again in 2012.  Until we get over the hump of these midterms, I don't think we're going to know what happens next.

Deciding which party the Democratic party wants to be, thinks it is, or how it is portrayed by the media, will determine, to a significant degree, where Hillary is going to factor in: will she be on an Obama ticket in 2012, a viable candidate for 2016, or just a great speech at one or both conventions, and out doing her own good works in the world community?  

Second, what kind of Democrat is Hillary?  There will be people who will argue that Hillary is closer to being in alignment with the ND (New Democratic) Party than the old, but on domestic issues - which I think are going to loom even larger in 2016 than in 2012 - she is definitely old-school - or at least she has been in the past: is that what the party poo-bahs want - or will allow?  

Third, I don't see her running as VP to Obama, but I also don't see her staying on as SOS if Obama somehow manages another grand bamboozle and wins in 2012.  What she decides to do after she steps down may tell us something about what she sees in her future.

Finally, it still all comes down to how the Democratic Party is going to identify itself, if it believes the turn to the right it made, beginning in 2006, is working, and whether they have the humility to admit it if it isn't.  I don't hold out much hope there; I don't see either Obama or Rahm Emanuel as particularly humble individuals.  

The night before Haverford, I was fidgeting in a Pennsylvania school gymnasium while waiting for Hillary Clinton and weeping over a dog. Senator Clinton, of all the candidates, brought out the pet-mania in a supporter. Canine attendance at her events was a phenomenon of the trail, and I had begun to take photographs of the various dogs, all wearing Hillary regalia, many squeezed into little Hillary costumes. On the evening of Monday, April 14, however, I realized that this penchant signaled more than enthusiasm. It was a sign that here sat a room full of losers--their loss magnified by their obliviousness to the reality that their candidate also was a loser. By April, despite Clinton victories in Texas and Ohio and a likely upcoming win in Pennsylvania, no one in the press, except for those prone to Super Delegate conspiracy theories, believed that Clinton would get the Democratic nomination.

But this was the time when Hillary Clinton, nourished perhaps by the respect she had received in the poor Hispanic communities of Texas, began to get her voice and a receptive audience--always now in a town's meaner streets and not, as only a season before, in the nation's professional enclaves, which had begun to drift into the Obama camp. Here filling the gym risers at the Bristol Borough Junior-Senior High School, listening to John Mellencamp's "Small Town" and chanting Hillary-Hillary-Hillary! were the working class folk who would stick with her until the end in South Dakota because she, more than any other candidate in decades, was finding a way to speak to the many and varied losses in these Americans' lives.

Second, the country in 2016 will still be mired in the 8th year of a Japan-like slump.  That will largely have been because of Obama's weak tea and self imposed constraints on policy initiatives.  Let's face it, Obama not only recognizes Reagan's transformation but accepts as limits on his own initiatives the status quo economic and political environment set in place largely by Reagan.  

In 2016, Democrats, if not the entire country, will be screaming for real & effective change in how the government approaches economic policy.  Clinton does not & never has represented that.  Like Obama, she & Bill made their peace with some form of supply side economics being a fact of American politics.  That should have changed already; it will of dire necessity change in 2016.

The only real question in my mind if whether Obama can win in 2012, or is he, like Gerry Ford, a President doomed by his willingness to play only on & within a playing field defined by the  opposition party.  After a strong primary challenge from a no holds barred conservative, Ford almost beat Carter and he was coming on strong in the final week of the 1976 campaign.

And it was the no holds barred conservative who ultimately won election and, regrettably, set the political debate for the next 30 - (we shall see) years.   I think a similar candidate, only this time from the progressive wing of politics, will win in 2016, and that is not HRC.  

As far as the veep idea, dead in the water for all the reasons you suggest and more.

Does anyone view his re-election in 2012 as a sure thing? Far stupider things are happening this election cycle (notable the selection of crazy people over establishment people) than I would have imagined in October 2008.