I do not think that she and her team are deluded. I think they have known for a while that they cannot win this thing without a miracle. The Clintons are hard-headed, practical, cynically calculating, and realistic when it comes to power (and money - when Dems get rich, it isn't greed).
But she is getting more than her share of time in the media sun (BTW, is a Repub also running for Pres? You would hardly know it.)
It's all about power. She keeps running to firmly plant the Clinton flag in the center of a Dem party which seems to be giving her a bit of a cold shoulder, and to show her tough stuff so that she will be a major force in the Party - and maybe a Pres candidate - in the future. If Obama goes down in the November election, she will look good and will become the #1 Dem. And if he doesn't go down, she'll be the heavyweight in the Dem Senate and the de facto #2 Dem in the country (overshadowing Al Gore, Ted Kennedy, Nancy Pelosi, and whoever the VP nominee is).
Thus she has much to gain by not appearing to be a "quitter." She can win by losing, but the timing is key to polishing her halo. She needs to sell on an up-tick.
The speech she will eventually give in support of Obama will bury the hatchet, and will be designed to make her look like a Dem angel. The Dem angel.