The President is generally just a mouthpiece for the policy makers. They make visits with dignitaries and get up and read speeches. She would be just fine. She just needs a kick ass cabinet to take care of business. Ron Paul, Peter Schiff, Andrew Napolitano, Pat Buchanan, Catherine Austin Fitts, Michele Bachmann, etc. She is certainly as smart as Reagan or Bush II.
It would be a trip, however, if she announced her new job as Chairman of Campaign For Liberty...
But even if she runs it could help because she could step aside late in the primaries and endorse Ron Paul or some other freedom candidate and sell a boycott of a Romney/Huckabee/Jindal type. Or run third party and kill the GOP again. Perhaps with RP on such a ticket. Don't forget that she will be a pied piper for a lot of the GOP base.
I think a Paul/Palin libertarian ticket could pull a solid 30% in the general election. Perhaps 40% with the right set of circumstances. This means throwing the election to the House of Representatives and a lot of deal-cutting in platform commitments. Unlike RP in 2007-2008, she can say loudly throughout the campaign and Republican debates: "I'm not play'in party politics. I don't care which gosh darn party it takes ta get it done, but I'm take'in all of the freedom lov-in Americans all the way to the White House with me in 2012! Who's gonna join me?!!"... or words to that effect. Then she and the Revolution can monitor all kinds of polls for strategy, such as: how many Sarah Palin, Ron Paul, or Rand Paul supporters would cross party lines and vote for one of them in a general election. But she can't herd any supporters or play this type of strategic roll if she sits on the sidelines and won't campaign for herself.