Political neophyte that I am, even I'm surprised by the Obama team's decision to pick Leon Panetta for CIA chief. Panetta has no intelligence experience, which is good in the sense that he's not in anyway associated with the CIA's recent debacles (WMDs, torture, rendition, etc.) but at the same time...he has no intelligence experience. But I actually don't consider that a huge drawback. Given the CIAs history of ineptitude, secrecy, a lack of accountability for failure and stifling bureaucracy, the real question is whether Panetta has the leadership kills to mold the moribund organization (or whether anyone has such skills.) At least with Panetta we are likely to get someone with new ideas but who remains committed to the rule of law.
Retired Admiral Dennis Blair is a more traditional choice for Director of Intelligence. He served as an advisor to Obama during the campaign, and is long-experienced in intelligence matters. It's impossible to say entirely what his impact will be though, given the uncertain nature of the post he's taking over.
UPDATE: Predictably, the choice of Leon Panetta has inspired some bitching from "professional" spooks who lament the choice of someone who is inexperienced in the field of intelligence. Considering that many of these professionals brought us the WMD spectacle, extraordinary rendition, torture, and various failures to spot important developments around the world, I'm with Milt Bearden (whose comments can be found at the end of the post) in saying that it's time for a different approach.