Here's an interesting pro-Putin article The west gets Putin wrong that is worth thinking about. Mary Dejevsky makes some good points, namely that Putin is weaker than he looks, and far from being a dictator, is casting about trying to stay in power by playing factions off against each other. Still, the argument that things could be worse, and that there is no constituency for more reforms--while true--doesn't justify the kind of self-defeating overkill that Putin has engaged in with the Yukos affair, for example.
Who would want to go into business in Russia, if the government can just decide one day to put you out of business, on a whim? Especially since Yukos was by all accounts the best-run company in Russia. That is the chilling effect to outside investors that Putin needs to resolve as quickly as possible, by letting Khodorkovsky go. Until he does, Russia's international image will continue to suffer.
One thought would be for Putin to release Khodorkovsky before V-E Day celebrations, as a gift to Bush for attending.