As for conflicts of interest, I purchased a copy of one of Sternberg's extracurricular talks on philosophy, religion and science. I found it provocative enough to engage, and I think he scores some good points. (notes here).
What concerns me is that the woman who sponsored and recorded this talk told me in the Fall of 2005 that she had received at least one investigative phone call about this lecture from the National Center for Science Education. I can only assume they were trying to dig up dirt on Sternberg. DI isn't the only polemical thinktank in this duel, and with so many people involved I am not surprised to find that there is a nice organized list of Sternberg's alleged sins.
What about that charge that one of Sternberg's Smithsonian colleagues was going around asking if he was an undercover priest? That seems surefire evidence of a hostile environment, though I cannot speak to its overall severity.
If you read the appendix after every bit of evidence that the report claims to show bias is counted, in the end, all the higher echelon of the Smithsonian ended up doing was next to nothing (except telling him to stop misusing his 'affiliation' with the Smithsonian in his creationist talks). Eugenie Scott(who is advising them about his status as a creationist) says very particularly:
"I guess the big question is whether he is a good enough scientist to remain there. If his non-creationist work is good, then I think he deserves the job. If not, and if others are let go under the same circumstances, then let the chips fall where they may. But none of us are after this guy's job. That isn't the point of this exercise, in my opinion."
and
">I'm sending you this info just so you know that low profile doesn't mean >inactive. On the other hand, his creationist views should not be the main >focus of the criticism. First, if he can do good standard science, that's >all we care about. Newton did pretty good science, and had some pretty >nutty additional ideas about reality, too. So if he keeps the nut stuff out >of his basically descriptive work, that's fine. His science should stand or >fall on its own. "
Sounds pretty reasonable to me. I didn't see anything where they asked that particular question, but they certainly didn't act on it in any meaningful way, despite what this report and the report of the OSC might have you believe.