He could name Gov. Schwarzenegger to some kind of environmental or energy post. Certainly, the governor wants the job, as he recently told the LA Times that he has plans to go to Washington and try to forge a "new approach to energy policy... People are very receptive when I talk about these things because I'm a Hummer driver... not a tree hugger." :
Practically, this makes all the sense in the world. Schwarzenegger knows these issues well, and a president running for re-election could use such an appointment to show he is reaching out to independents and Republicans.
But... but... but... It is hard to overstate the anger among California liberal Democrats and lefty activists at Schwarzenegger. (One prominent liberal blog, Calitics, often refers to Schwarzenegger as "Worst. Governor. Ever"). A Schwarzenegger appointment by Obama might be another finger in the eye that could cost the president even more support on the left.