An ex HP contractor here.
I had a good 3.5 years at HP, and even though I got a lot of crap here on Slashdot last time I commented on HP related news regarding how ugly the way they terminated my contract in the end was, I haven't been suggesting everybody I know to avoid HP products like plague; x86 ProLiants are still pretty good hardware, I've always preferred HP displays both at work and at home, and as long as you avoid their consumer models, you'll get yourself a pretty good laptop from them. Those products I can definitely recommend still.
However, the company was working against itself already during the time I spent there. Managers were mainly concerned in staying out of the way as long as their performance indicators seemed fine, and while us higher level Unix support folks were seemingly given free hands in solving the customers' problems, that freedom was an illusion, as I learned a couple of years after leaving and hearing all the stuff said about my working methods (example: using SSH tunneling via an SSH proxy dedicated for this purpose by the company) by people incompetent to make such judgements.
And that's where I see HP's biggest problem - during the years of growth, so much incompetence has found its way in in that the company has been forced to lay off A LOT of people. Unfortunately for HP, the same incompetence has prevented the company from telling the difference between competent and incompetent workforce. Layoffs are a simple numbers game for them.
I feel pride for the way I improved the support process during my stay and how I was part of a highly skilled team, each member with his own strengths that made the team greater than the sum of its parts; I still remember my teammates with warmth. But HP had already grown too big to be efficient by the time I worked there, and this resulted in an organisation that doesn't know where it should and wants to go; and excluding Whitman (of whom I have no experience), the recent CEO's and high level politics definitely haven't made me optimistic about the future of HP.