I think that Elena Kagan as SG and Dawn Johnsen as head of the Office of Legal Counsel are both *excellent* picks. Kagan is almost literally universally admired on the left and right. She has had a stellar career and has really done wonders at Harvard (inc. recruiting top conservative law profs to the school). That she doesn't have appellate experience is not a big deal - other SGs have lacked it, and the key to the job is brilliant legal thinking and she's got that. It's of course possible she won't be the best at oral argument, but she'll probably do fine.
It will be hard for anyone to improve upon Paul Clement, the SG for most of the Bush years, who was truly an over-the-top brilliant amazing SG, probably the best appellate advocate ever in that spot*, but falling short of that is no shame. Anyway, while I guess she's liberal, I don't think that's shown up much in her work over the years, it's not a particular calling card of hers like it would be with, say, a Laurence Tribe or something, so it would be wrong for people to focus much on that. For 98% of cases, there's no difference between a conservative administration and a liberal one. The other 2%'s a bitch, but that's the way it goes, and it's Obama's call, not hers, which way the case will be argued (but obvs she has significant input into strategy on such a case). My Federalist Society colleague took a class from her at Harvard and said "she is a rock star."
As for Johnsen, I first came across her when I worked on the Violence Against Women Act. Johnsen was legal director of NARAL at that time so she was in on lots of lobbying and strategy sessions and I remember her well from that. I couldn't always keep up with the legal discussions over the bill at that time since it was before law school, but she was one of the few people who really stood out to me then for her astuteness and quick-mindedness and general brilliance. I've kinda followed her work over the years because of that connection, though mostly over the past few years that's meant seeing her on the Lehrer Report talking about executive power (and abuses thereof) under Bush, and she's been equally impressive on that front as on the feminist front. She worked at OLC long ago so she really knows that office, so I think it's a very good pick, and potentially the most important one he can make at DOJ. Any smart person can be SG -- I would've preferred Kathleen Sullivan over Kagan, but Kagan's a great choice -- but at OLC you really need someone who's truly brilliant for that office to work the way it's designed to (OLC's job is basically to set limits for the president, to know when to tell him NO, so you need a really good thinker to be able to set those boundaries properly, which did not happen under Bush b/c it was so politicized).
Also, there had been a lot of talk about Kagan maybe being Obama's first pick for Supreme Court justice. But by having her as SG, I think that goes out the window- I don't think he'd elevate her within a year or two, which is when the next opening's likely to occur. I think she'd reasonably have to be SG for longer than that. So I think this means that his first pick will be a minority, and I'm pretty sure he wants to appoint the first Latino to the court, which means Sonia Sotomayor's (brilliant 2d Cir judge who I think is pretty well-respected on both sides of the aisle) stock just shot up significantly. Also, IIRC, Sotomayor was put on the federal bench (district court) by Bush 1, then elevated by Clinton, so she's an even safer bet for Obama. I don't know whether she's been involved in any controversial decisions in the 2d Circuit that people could arguably characterize as ideological. Nothing jumps out at me.
* As a minor example of his brilliance, Clement never brought anything with him when arguing before the Supreme Court. He just went up to the podium and held court, as it were. Some arguments at lower courts are certainly doable without notes, but at the Supreme Court??? Dude, I love that guy - the best in the business. Extremely conservative, but still I can't think of anything that should keep him from the Supreme Court.
There was also an interesting tidbit at the end of the e-mail hinting at a rumor my source will not commit to characterizing as either wild or not so wild, that the vaunted Mediterranean diet may not be so heart-healthy as thought, at least not for one of the current supremes. Although, should Death come a-knockin', he'll most likely just say vaffunculo to Death's bony ass with a chin flick and be done with it. Interesting nonetheless, and possibly putting Kagan or Kathleen Sullivan in play for a second SC pick sooner than anticipated, so do stay tuned.
Cutting-edge analysis, we haz it!