Like myself and others here on FR said a while back...we thought Cheney may resign prior to election year, in order to have a more viable choice for the republicans in '08. Between this and his recent clot problem, now may be a good time.
I agree moving someone viable into the slot now would have been a smart political move had Libby walked, but perception is everything, and it would be twisted so bad that the stink would cover anyone taking over.
The biggest problem is that there are so many stupid people out there that believe what the big three say every night, the best we could hope for if that happens would be a wash from good to bad and the candidate remains in the middle.