There wouldn't be a worse thing for the 2004 election than if Lieberman won the Democratic nomination. He's the most conservative of all the candidates, the most "Bush Lite", and offers no representation to those who have an interest in the right to privacy. Those who care most about aggressive foreign policy and strong moral values, and those who respond to a folksy neighborly fellow, would probably just vote for Bush. Those who care most about the economy and "other domestic items" would probably be drawn to whatever third-party candidate would inevitably surface to challenge him. Most of the appeal of Lieberman is his "electability", a diagnostic term that has less to do with voter appeal and more to do with attempting to guilt the voters into "doing the right thing". The problem is that he's a compromise candidate, and there's a difference between compromising on an issue and compromising on a candidate. Voters know this, and it's why, if he gets the nomination, we will see even more third-party "vote stealing" squabbling than we saw even in the 2000 election.
The problem is that they've got their strategy all wrong. If you want to win, you don't pick a centrist that pretends at times to be an extremist. You don't frustrate the attuned senses of the loyalists to try and lock in the inherent wafflers. You do what the Republicans did with Bush - you pick an extremist that can act like a centrist. Right now the Democrats don't have one of those, we haven't for a while, and until we do we are probably screwed.
Lieberman better not win. I've written before about how after thinking for a long time, I believe voting for the principled "third party" candidate is an unprincipled vote if the vote is submitted in an unprincipled system (as ours is). But if Lieberman is elected, it would show that the Democratic party has learned absolutely nothing from 2000, and that the party as it is now needs to be destroyed as soon as possible. There's no way I vote for someone who places personal morals above citizen freedoms. Freedom IS moral.