Instead, she may withdraw and seek to lead her party in the Senate, according to the Sunday Times U.K.:
The prospect of a Hillary for President campaign has put much of the Democratic establishment in a bind,Time concluded. The early line is that Hillary would be unstoppable in a Democratic primary but unelectable in a general election.
The solution, insiders say, is for Clinton to take over as Senate minority leader in 2009 from lacklusterstre Harry Reid, senator for Nevada. One well-respected blog, The Washington Note, recently claimed that Reid privately told Clinton the job was hers if she gave up her presidential ambitions.
As a Canadian observer of U.S. politics, I think this would be a great move. Hillary is just too much of a bogeywoman for the American Right to run effectively in the South and Midwest--in the Red States, in other words. Not that I think she's done anything to deserve such a reputation, other than make a few comments from many years ago that might have been construed as rebukes to Conservative, stay-at-home moms (she once said something like: "What do you expect me to do, stay at home and make cookies?").
But I think Conservative fears of successful, "aggressive" women are still prevalent across great swathes of the U.S., and at this point in history they're just not worth fighting. Especially since running a standard white male in a suit might mean that the Dems wind up running the Senate, House, and White House in 2008.