I don't really like that idea, as it would bring out the worst in the Greens, but there are huge areas of overlap (agreement on university tuition fees for starters) However, I have to admit, that this is possibly a late 90 szenario and not quite up to date anymore. Also what ever happened to the Social Liberals, did they really all leave the Liberal Party in 1982? Baum, Leutheuser-Schnarrenberger. Well thinking of Günter Verheugen, I sort of answered my own ramblings. Still.
I have to agree with you Jerome to only some extent. I don't think the extreme right is going to benefit on national level in the short or long run. But in general a Grand Coalition would only hurt the big parties.
One other thing, I would also be interested to hear is the influence of the expected election turnout and how this is weight in the polls - are there any poll experts among us?. As I said in another comment recently, the higher the turnout, the lower the % the Linksparty is getting, if the statistics about the PDS can be trusted.
Let's also not forget, that the judges will have a final say on the 22nd of August. Although i don't think they will "dare" do declare the dissolution of parliament as unconstitutional. That would give quite a stink....
BTW, the Greens are against tuition fees up to the first academic degree. I haven't yet read the manifesto of the CDU in detail to judge the overlap, but it's not large, no doubt.