Holder at Justice and Daschle and HHS. Two good picks. The info on Hillary at Senate isn't solid, so I have no way of knowing if, in fact, she will be Secretary of State. Josh Marshall says he needs help understanding this pick.
First, there are negatives to naming either of the Clinton's to a position of authority, but I think they are related more to the press' utter insanity when it comes to the Clintons. They will receive all sorts of weird press for the simple reason that the press hates and fears them, and journalists waste all sorts of energy on nonsense when it comes to Bill and Hillary. This, more than any alleged deficiencies either brings to the table - speaking on the merits, now.
On the other hand, I think that, as I have said before, Obama is entering office with far more authority and political muscle than any President since George H. W. Bush in 1988 (and, maybe, Bill Clinton in 1996, although he was hampered by the Republican efforts to get him booted). However rough and tumble the Democratic primary may have been, the policy differences between Clinton and Obama are minuscule. Furthermore, one thing Clinton did quite well was keeping the US on pretty good terms with the rest of the world. He was far from perfect - the Iraqi embargo was responsible for thousands of deaths; he stumbled a few times, in Haiti and Somalia during his first term, for example - but had tremendous success in engaging the African continent, for example. Mrs. Clinton and Chelsea did a whirlwind tour of the continent toward the end of his second term that was a triumph; I think this should be kept in mind as well.
Both are committed to reestablishing the US as a legitimate player on the international stage; both are also committed to redressing various grievances other nations may have against the US due to the multiple bunglings and crimes of the Bush years. Finally, I think that Hillary Clinton understands that this is Obama's game, and he knows how to play it.
As far as Foggy Bottom being a recalcitrant bureaucracy, I think that is only because they are constantly undercut by Presidents who have thought they knew what they were doing overseas, or tried to bypass that bureaucracy in order to achieve some fanciful goal. Morale at Foggy Bottom is perpetually low because they do not believe either Secretaries of State or the President they serve take them seriously. In Barack Obama, however, that might change. Putting Hillary Clinton in charge might be a way to show them that they have a sympathetic ear at the cabinet level.
Of course, I might be wrong about this last point - hubris is something the Office of President is designed to heighten - but I think, for the time being, career foreign officers would be assuaged a great deal by a Clinton Secretariat. Unlike the failed Health Care business in 1994 and her Presidential campaign - the former of which failed only in part because of anything she did; please remember the Republicans went in to overdrive to ensure nothing came of that - she might be Administrator of the State Department, but she will be following the direction and orders of the President. To that extent, I think any alleged administrative failings she may have will be compensated for by the brief she gets from the future President Obama.