I, for one, think we need a lengthy leadership race, in order for Liberals to have time to get to know the candidates and where they stand. There's no rush and I don't see much of a downside to keeping Harper in power for the time it will take the party to rebuild. Even a May 2007 convention date doesn't seem too unrealistic, although I'd be happy with a February or March convention, if logistical or financial reasons make that necessary.
There's nothing to say the policy renewal process can't take place at the same time as this is going on. For an example of a grassroots initiative by a few Young Liberals at McGill, check out this site.