There are many reasons why Hillary lost the nomination to Barack Obama. I think the following are the most important ones:
1) She badly misjudged the mood of the nation. In a year when people were crying out for change, she ran on a platform of experience. In a normal election year this might have worked but 2008 is a transformational election. People are demanding change and her campaign came to represent the same tired, cynical machine politics of the past.
2) Her team badly misjudged the importance of the early states and particularly those like Iowa or Nevada which held caucuses. These give candidates momentum and once Obama established the "Big Mo" it was hard for Clinton to come back.
3) Organisation - crucial to electoral success in America. She tired to win by concentrating on the big states, spending her money early on commercials and TV adds and acting from the get-go as the presumptive nominee. She failed to build networks of grassroots activists, comparable in size to Obama's, who would organise for her and 'get out the vote.' When her campaign realised this, they failed to act quickly enough.
4) Bill. His reference to Jesse Jackson's failed primary bid in 1988 caused a stampede of African-Americans away from Clinton and to Obama. Before then, her popularity amongst African Americans was remarkably resilient. After Bill played the race card, she lost the support of that community for good. No Democrat President since 1950 has won without it.
However, her tenacity, resilience and intellect make her the second most powerful Democratic player in the country. She has come closer than any other woman to winning the Presidency. She is the most successful woman in American political history.
She would do well to get Obama to sign up to her health care agenda and take on some of her staff. This would show unity. I also believe she would be the best choice for Senate Majority Leader. In this position, she could play a powerful role in Washington and see many of the policies she has spent a lifetime campaigning on enacted into law.