Michael Tomasky runs through the negatives for Hillary becoming Obama's Vice-Presidential nominee: he would inherent her weaknesses, her foreign policy stance, they couldn't work together, and then there's Bill. I would add the negative of some of her comments and insinuations during the campaign about his ability to be Commander-in-Chief in particular. Republicans would have her comments on a loop during the whole campaign if she was VP nominee.
I guess it comes down to whether he thinks he can win over her voters. He will be fairly confident of achieving that and so won't risk the negatives that Hillary represents in my view. Also, he's in such a strong position now that he can avoid having a unity ticket foisted upon him by the party. If not Hillary then who? Well, I've always thought that Bill Richardson would make an interesting choice but let's see how the debate shapes up.