While I'm not crazy about the ongoing Barack Obama-Bill Clinton smackdown, I get why it works for both campaigns.
As we saw in the quick "truce" over Hillary's comments on Martin Luther King, Obama and Hillary Clinton realize that direct attacks on each other (especially on volatile issues like race) are tricky. If she attacks him head-on, she risks looking mean-spirited and petty (and at worst racist); if he attacks her head on, he risks looking nasty in a way that drags down his positive campaign (and at worst, he looks sexist--cf. "you're likable enough").
But Barack vs. Bill is a lot more comfortable--the press and public seem to rather enjoy watching two men whaling on each other. And Bill's enormous popularity among African Americans ("first black president," etc.) seems to insulate him from any suspicion of racism, in a way that doesn't seem to apply to Hillary.
Still, I can't help thinking that continuing down this road is not good for anyone. The risk for the Clinton campaign is that it reveals--and tests--the extent to which Hillary's campaign rests on nostalgia for Bill's presidency (an appeal to which I am not totally immune); if "the man from Hope" begins to look like a meanie who's trying to bring down Obama, I don't think it bodes well for Hillary the rest of the way. On the other hand, it could also significantly weaken Obama by forcing him to more aggressively attack Hillary, which I think is a losing proposition for him. (This is where I think maybe the Reagan comments were pretty smart: it allows Obama to (rhetorically, at least) distinguish himself from "Clintonism" without having to attack either Clinton head-on.)
You could make the argument (as I think some Democratic activists are) that these fisticuffs are a good thing--they get everyone sharper for the general election. This is especially true for Obama, whose ability to go negative and/or respond to vicious personal attacks has not been as obviously tested (although my theory, as I've suggested, is that such personal attacks do not seem to work very well against Obama, which I think is one of his major strengths for the general election). The worst-case scenario for me would be that a long series of attacks back and forth turns Democrats off of both candidates and dampens enthusiasm for November. I don't think that's likely, but it is already taking some of the fun out of all of this.