As a nation, we are entering a new evolution in work, much like the industrial revolution, many job candidates will have to take jobs that pay less and are less to challenging for quite a while. Until the economy recovers AND adds jobs, employers will find many overqualified candidates. Many of those candidates will be happy to have a job and may not be able to leave within in a year.
Smart candidates will make their peace with the current and foreseeable reality. Employers, hire with caution but do not avoid overqualified candidates.