Very perceptive. That is exactly what she is doing. She's been positioning herself to the right of the Wall Street Journal / Open Borders wing of the Republicans (which includes Bush) since last fall. She's got a little less than four years to re-invent herself along the lines you mention, and she's well under way. The electorate has no memory. All of the outrages and shenanigans of the 90s will be forgotten by 2007.
The Clintons were undoubtedly ecstactic about John Kerry - the ultimate elitist socialist aristocrat - getting the nomination. I expect Hillary will not face any serious challengers when the 2008 season rolls around. I agree with you that the Michael Moore / DU types are being set up for a Sister Souljah moment. If the Republicans continue their present course over the cliff and nominate a hard-core, unabahsed liberal like Giuliani, Hillary will be president and likely win both houses of Congress for the Dhimmicrats as well. Even life-long Dems I know are tremendously angry about the out-of-control borders.
Yes, the electorate has no memory.
During the 92 race Chris Matthews said something that stunned the hell out of me. It was at the height of the Gennifer Flowers thing. He said, "The voters are protecting Clinton". He was right. The voters were choosing to give Clinton the benefit of a doubt because they wanted an alternative to George Bush I and they wanted for the health of our democracy for the Democratic Party to be viable again on the presidential level. The voters felt that a democratic candidate willing to stand up to Jesse Jackson needed to be supported and encouraged.
If the GOP cannot right itself on this issue, the voters WILL give Hillary the benefit of a doubt, not merely because of immigration, because they will support a Democrat willing to tell the deviants and Europe worshippers and God haters to go to hell.
I think it was Boris Becker who defined Barbra Streisand as a woman who looks good from a distance.
Giuliani is a kind of political Barbra Streisand. Up close he has this "my way or the highway" arrogance, questionable marital fidelity, questionable associates, and lots of other weaknesses. If he becomes candidate, some day, some way on the stump he is going to lose it and say something that will cripple his candidacy.