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I think it would complement more than muddle (Dan Quayle didn't muddle George Bush I, Cheney didn't muddle Bush II, etc.). 1) Biden will toe the party line if he's the VP and say that he was wrong (about whatever...the war, washington, being in office for so long...) and it will allow Obama to create "unity" while having someone who could be perceived as an insider say "look, i see the error of my ways, he's right - this place IS f@#ked up!" It's sort of like how Richard Clarke helped undermine the image of the Bush Administration on terrorism and war (for me anyway, and probably anyone else who was paying attention)
2) tens of millions of voters were wrong about the Iraq war (including the half of the electorate that continued to vote for Bush in 2004), so it's not detrimental to given them a dignified climbdown, as you say;
3) lots of voters don't want "change"...meaning racial identity change - allowing people who need it the reassurance that they want on race will be soothing (and Obama likes to soothe) while allowing them to push the "anti-dumb" constructive-solution Obama agenda (even when it is dumb).
I agree he might be the most inoffensive and useful of the remaining middle aged White dudes under consideration - the only thing i fear from him beyond that i have to hold my nose a bit is that he has a tendency to put his foot in his mouth. and he won't help with any states. but as a calculated choice for obama's brand of "change" he seems to make sense.
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