I think she's a top contender this year.
(1) Martina's return has to influence her...afterall they were rivals for a time and the last time they played in Australia...Martina slaughtered her in the semis. (How cool would a V. Williams vs. Hingis first-round match be!!!!)
(2) She had an very credible second half of the season last year...while she was healthy. She won Wimbledon and barely lost to Clijsters in New York and Stanford.
(3) I've always thought she should play better on rebound ace...with her height.
(4) By all reports, she's looked really good on tour with her sister this winter. I think she's won almost all of her matches. Given the tour, and the exhibition she's playing in Hong Kong...she should come into the Aussie fairly match tough. I mean...she's been on tour playing the defending champion all winter...and winning against her.
(5) She has proven, time and again, that she can come out of nowhere and grab a slam or a major title (like Key Biscayne etc...) with little to no match play.
(6) Little pressure...she has very few points to defend.
I have a feeling that her name should be included in the favorites this year. To me the favorites are...Venus, Kim, Lindsay, Mary and Amelie.
I think a lot depends on the draw she gets...given the fact that her ranking will be so low she may end up with a really tough 4th round match.
Just my opinion.