While I don't think he could win the general election due to character issues, he would serve the party's interest by coherently stating what conservatism is really about and why the country voted overwhelmingly for conservatism some time ago. Newt is a "big ideas" guy, something the GOP has been devoid of for about ten years, and would at least get the party back on track for gains in the future. Interesting, but it would almost definitely be a 2012 sacrifice and I don't see it happening. He's big on Bobby Jindal. I could see him pressuring Jindal for a run and advising him in 2012.
I totally agree. Newt will anoint his "heir apparent". Whether or not it will be Piyush Jindal, Mike Pence or someone else is not clear at the moment. But you're correct -- Newt is very high on Jindal at the moment. Republicans need someone who IS conservative on social issues, but doesn't make that his or her identity. Social conservative is already Sarah Palin's identity and she's stuck with it.
Pence and Jindal can downplay those issues (as GWB did in 2000) and hammer away at spending and fiscal concerns. I'm guessing that would be Newt's advice.