Seth Godin in one of his latest posts Yeah, but he really knows his stuff... Points out that we should not tolerate workplace bullies and terminate them immediately. Yes they can be replaced and the value to the larger group far outweighs any perceived benefits the bully is providing.
Seth says it well, "...the bully knows this, and the only reason he gets away with being a bully is that he thinks he's got you bluffed. Call his bluff..."
Talent and skills are important in the work place and yes we need people more than ever that can get stuff done. But I remember a manager early on in my career who said, "The ends do not justify the means. I don't care if you were successful if I have to clean up dead bodies along the road." He was referring to the fact that though the project team was successful we did more long term damage by alienating core supporters in the organization.
Don't be a bully in the organziation and don't tolerate them either. Some individuals may not know they are bullying others so give them an opportunity to mend their ways. If they show a geniune desire then help coach them to success. But if they are unwilling to change then the organziation will be much better without them.