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I cringe a bit every time I hear "Hillary" instead of Clinton. I do think it is diminutive. But I understand first that she is trying to differentiate herself from her husband and second that she is fashioning herself as a brand. Given her rather stuffy image, I can see how she might embrace the diminutive whenever possible. She's not the first to do it: plenty of folks liked "Ike" when "Eisenhower" was an unmanageable and uncomfortably German sounding name.
I think, however, that in the end this will backfire for her. Perhaps it's a deficit of imagination on my part, but I find it very hard to envision a President "Hillary" representing our nation at a G-8 summit or delivering a State of the Union address. I can't conceive of a President "Hillary" Memorial Library or a statue of "Hillary" gracing the lawns of the capitol. If she's going to embrace the diminutive to brand herself for the election, she's going to have to make sure it doesn't keep its grip on her long after she's ready for it go away. And given that women start out with a disadvantage in that arena, it seems quite a gamble indeed to me.