Even "the evil one" isn't evil enough to try and pull that stunt. Unless Obama totally screws the pooch, but I think he is smarter than that. (barring any off the wall scenarios)
I wouldn't underestimate her. it would be the first time a relative of a former president ran against the incumbent in the primary. And also, in the early states, if Hillary could convince most of John Edwards supporters to back her, she would win Iowa and New Hampshire and come close in South Carolina. That could give her enough momentum to be a serious threat for the nomination.
Obama got a majority of the vote in South Carolina the first time, and his support will only grow unless he has a bad first term. If he does, I could see him being beatable since he's basically setting himself up for failure.