Giuliani is a social liberal, not a moderate as he is often described by the media. I think he knows this will make securing the nomination extremely difficult (just as it would be for Sen Nelson of Nebraska or Bayh of Indiana to get the Dem nod), so he is going all out for Bush in the battleground states and for GOP Senate candidates in the tight races so as to build up his good will with the base, so as to say that he went out there for people he doesn't agree with on social issues and those same types should then return the favor in 2008.
He wouldn't be my first choice, as I fear he'd be terrible in picking judges and filling administrative and executive branch posts. I think he would sit back, and for example, do nothing as gay marriage is imposed on the nation.
But he'd be better than Kerry or Hillary. There would at least be a chance he could pick a good judge for the Sup Court. There is no chance that Hillary or Kerry would screw up and accidentally pick a good one.
He wouldn't be my first choice either. Heck, I have no idea who my first choice would be at this point.