The US election isn't till November 2012, so almost a year and a half away. Frankly, if Obama was timing this as an election winner, he'd have held off for a bit longer. Some analysis I've read has already suggested that the boost he'll get from this will be negligible come election time.
I don't like to think of someone who takes pleasure in a human being's death, but there are a very small number of exceptions. Harold Shipman was one. Saddam Hussein another. Now the same is true of Bin Laden. People who deliberately cause the death of many others, and who enjoy inflicting suffering? No loss. The world's better off without OBL - a known and confessed terrorist.
This is a difficult one to play for the Americans re dealing with the body, burial, identification and so on. Basically, for some people nothing would be enough. They could put his body on display in a glass case and conduct the DNA testing live on TV and still people would say 'they're lying, we're being tricked here'. So the question is where to pitch it in order to provide reasonable prooof without being seen to be overly triumphalist and insensitive in doing so - and parading the body, releasing badly chosen photos, or delaying burial in a manner that disregards Islam's requirements for a swift interring of the body (within 24 hours IIRC?) would all be regarded as bad choices displomatically speaking.
This is now a chance to end a particular unahppy chapter of conflict and draw a line under US involvement in Afghanistan, etc. That potentially makes the world a safer place, or could do in the future. A for the increased threat - again, for people who are of that way of thinking, there will always be a reason to attack. It's just as likely that people will be put off fighting for what may now seem like a cause that's lost its momentum.
Conspiracy theory stuff: I do think, though, that this was the real reason behind the postponement of Will & Kate's honeymoon. I also think it's quite possible that the actual raid was timed to take place when global media attention was focused on the royal wedding. Given the opportunity, it makes sense.