She made the right move in proroguing Parliament. I know a lot of liberals and progressives out there will be disappointed that Harper has lived to fight another day (and really, that fight might come immediately after January 26), but in the long run, it's for the best.
Harper overreached. He knows that, and he and his party are chastened. They are still a minority government, and they need to act like one. They will now get to work on a budget that the opposition will support, meaning real concessions on the economy and no more poison pills like the removal of campaign financing dollars or crackdowns on public employees' rights to strike.
This unexpected vacation will give all the parties time to step back from the brink and think about what is best for Canada and their own political futures (there should be some overlap). We'll also have a better idea of what the US is planning to do on their end before we march ahead with a massive stimulus.
Meanwhile, despite all the fireworks, the rest of the world has barely noticed our Grave Political Crisis. How typical.