Hillary has been lying low since the DNC. Hasn't said much in public yet. Some people are wondering why. TPM has a good post on this: The Obama and Clinton camps have agreed that Hillary should not go on the offensive against Palin just yet.
I agree with this. If Hillary jumps in, it will be a distraction. Obama has to fight this without her help, at least for now. I think Obama has responded well of late, particularly on the "lipstick on a pig" thing. The race is tied right now, but that's partially because of McCain's convention bounce. Palin is getting all of the attention, but that's because she's so new.
This race has to be about Obama vs. McCain, about the Democrats vs. the Republicans, about Obama vs. Bush's legacy. I think Hillary and Bill will be able to make good contributions when Obama has inflicted some serious damage on McCain/Palin. When Obama and Biden has softened up McCain and Palin, then Hillary will be more effective. She should jump in when Obama has set the terms of the debate. Otherwise her presence becomes part of those terms.