I don't think it will be a demotion. As Chuck Todd said, if Obama does pick Clinton, then the press is going to cover the office like the world is coming to an end. The office will be elevated is some sense. She will be followed everywhere. The next SoS has A LOT to do, so it is not like she will be sitting in her office all day long.
The only problem for her, if it is offered, it is a temporary job. She could be out of a job in four years if Obama does not get reelected. She could be pushed out. Then again, there is always the possibility for Defense or VPOTUS.
AUMF: Obama does not even know how he would have voted if he was in the Senate and he chose Biden, who voted for the Resolution, as his VP. Kerry voted for it as well.
Kyl/Lieberman: Obama was not there to vote. All it was was a "sense of the Senate" vote.
Obliterate Iran: So if Iran attacks Israel with nuclear weapons, we let them go free? The question was, what would you do if Iran attacked Israel with nuclear weapons. I thought he answer was appropriate.