I've read a couple of Guy Kawasaki's books and my favorite is How to Drive Your Competition Crazy -- read it if you get a chance. Guy's latest blog posting is a (not-so-funny?) top 10 list of how to determine if your company is suffering from an excess of bozo's. I see Robert Scoble determined that #9 hit a little too close to home. Guy is willing to amend his list with good submissions from the community...stop by and see if you've got any great ones to add.
The bottom part of the post is probably the most valuable piece. It lists 7 ways to address the problem. My favorite is the first one: Insist that managers hire better than themselves. Excellent advice.