Here’s the possible downside: Hillary rivals like Obama or Edwards can cite this as an example of the unique level of Freak Show attention (to borrow the phrase coined by Mark Halperin and John Harris in their book, The Way to Win) Hillary attracts. She is a powerful magnet for scurrilous myths--ones that fit into well-established media narratives that lead to just-add-water headlines. (Note how, even after the Hillary campaign corrected the initial NPR story, Drudge had posted a link to a similar episode from 2000. The message was, "Okay, maybe this story isn’t right. But we all know it’s the kind of thing she does.") To be sure, Obama and Edwards take plenty of Freak Show flak themselves (Obama’s “madrassa,” Edwards’s haircut). But Hillary is in a league of her own—which goes back to the question of electability. I suppose Democratic voters will have to decide whether they think the Clinton team's experience in dealing with the Freak Show outweighs Hillary's vulnerability to it.
And meanwhile, somewhere in the heart of Iowa, lies a Maid-Rite that's had media wrecking ball swing right through it. Kind of sad.
Update: Yglesias thinks along similar lines and concludes the electabilty answer is "unknowable."