There's something kind of cool about a guy winning a national election on a platform of coca-chewing. Whether Morales can actually improve things in Bolivia is of course, an open question, but he has been democratically elected, and should be encouraged and allowed to do his job.
Which means, really, one thing to me: We need to be watching our own government carefully, which has a long record of meddling in the affairs of South American countries, most recently in encouraging coups against Hugo Chavez of Venezuala. Chavez may be a complete loon, but he's Venezuala's loon, and serves at the pleasure of the Venezualan people.
Call me Chomskian if you will, but America's actions in Chile, Guatemala, El Salvador, Nicaragua, Panama, etc don't make me be proud to be an American. At some point, the USA needs to come up with a foreign policy in South America that doesn't involve propping up corrupt elites and turning a blind eye to their human rights abuses. Eventually the people of South America will gain some control over their own destinies, and it is in the long term interest of the USA that they don't end up doing it in spite of our best efforts.