I agree that she can't afford to lose the 2006 race.
Not losing by not playing the game in 2006 is an interesting strategy.
Being out of office for 2 years before the 2008 primaries may work to her advantage by avoiding a loss that would be appended to her record. It may work against her since private citizen Hillary may be less news worthy than sitting U.S.senator Hillary. Then again the old media seems to be favorably disposed to support her at all costs and would overlook her lack of office to push her into the presidency.
Actually the fight for 2008 will again turn on the ability of the republican candidate to overcome the onslaught of the old media and get their message out to the voters. They must also get those voters to the polls. This does not depend on who the democrat candidate is. The old media will support them regardless of who they may be.
if she pulls out of the 2006 race, she will be on Oprah immediately, talking about 2008.