A key concern would be whether she still harbours Presidential ambitions of her own. (In my view that would disqualify her).  A Secretary of State is the nations top diplomat who must often take responsibility for the messy compromises that negotiated solutions almost always involve.  A SoS more concerned with grandstanding to a domestic political audience is not going to be able to negotiate such agreements.

A key consideration in appointments must also be whether they are sackable if things go wrong or if unpopular decisions have to be made.  If Obama finds himself stuck with an unpopular SoS whom he also can't sack because of the political fall-out to his own Presidency, then you have a lose-lose situation.

I would have been more comfortable with her as VP than as SoS, because a VP doesn't have to DO anything.  Cabinet members have to be sackable to prevent the Presidency being damaged when things go wrong - and not "too big to be sacked".  

I appreciate her stature would also provide Obama with political cover if unpopular or tricky decisions have to be made, but that presupposes that she would be prepared to make those decisions (however damaging to any further Presidential ambitions she might have).

Bill might be a complicating factor, but the real issue is Hillary.  Who will she be working for?  Obama or herself and her own Presidential ambitions?

notes from no w here