Hitching herself directly to the Obama Administration almost guarantees she will not run for President in 2012. This could be really good for Palin in 2012. She’ll most likely face an Obama/Clinton ticket in 2012. Palin has already run against Obama, she knows what to expect and will be prepared. Plus, she'll be the breath of fresh air against the extreme left of an Obama/Clinton ticket.
This news was initially surprising to me. I was thinking that Hillary wanted to distance herself from Obama, sharpen her voting record even more as Senator, take a few opportunities to reach across the aisle (attracting moderates), occasionally disagree publicly with Obama and raise more money to run for President again in 2012. I thought she would never want to be "chosen" to do anything.
Being Secretary of State she won’t be involved in domestic issues or representing her constituents in New York. She’ll be firmly with Obama. That’s an extremely risky choice given that Obama has zero foreign policy experience. There would be no way to distance herself from any negative outcomes as SoS. On the other hand, anything good that happens will be attributed to Obama. SoS tenures are typically short and easily terminated. If there's friction between her and Obama she could lose that job quickly.
In my opinion, if she takes the job she'll appear to be even more power-hungry than she already does. It looks like she would settle for any position of power now. I don't think it would be a good political move for her to abandon the people of New York at this point - but that's good news for us.
My prediction is the natural one if this comes to pass – I predict she will abandon her Presidential run and Obama will select her as his running mate in 2012. Look for an Obama/Clinton ticket to face Palin and whomever she chooses in 2012.