She's former Connecticut Secretary of State, Democrat Susan Bysiewicz. I frankly don't know much about her, but she has won statewide races before and will be formidable.
Her candidacy announcement signals that she'll focus on Lieberman's attention deficit with respect to his home state.
As reported in the New Haven Register:
In a statement released earlier, Bysiewicz said, “We need a senator who is 100 percent focused on helping our state, and Senator Joe Lieberman has been focused on everything but Connecticut. I will only work for the people of Connecticut so we can create jobs that keep our children and grandchildren here in Connecticut for generations to come.”
As for the Senator himself, The Register reports that he has made a decision whether to run for re-election and will announce it tomorrow at a press conference in Stamford:
“After many thoughtful conversations with family and friends over the last several months, Senator Lieberman made a decision about his future over the holidays which he plans to announce on Wednesday," said Lieberman press secretary Erika Masonhall in an e-mail to the Register.