Clinton did leave the presidency with an image of failure, but can anyone really claim he failed after seeing W's presidency?
Honestly, I think it could have led to a Democratic president in 2008. Once again, the Democrats completely failed to nominate someone capable of beating a mediocre GOP candidate. Of course, no one knew John Edwards was sleeping around, and the fact that we found out in August really hurt us (Bill Richardson as the Democratic nominee? Come on, seriously.) I think that had Hilary's campaign for president had Bill's backing, she could have done serious damage. But I just don't think that a women's rights lawyer from Little Rock would have any major chance of winning the presidency.
I did hear that she was considering running against Giuliani for Senator in 2000 in NY. Imagine if she hadn't divorced Bill, and had run in that election. Would she have a chance against Rudy? Do you think that he still would have been elected president in 2008 had she run against him, or would it get butterflied out? 8 years was an awful short time in the senate to get nominated (esp. because McCain had like 30), but his argument that running NYC was like being a governor of an important state had a lot of currency.