How far do you let a mean employee go?

If you had an employee whose demeanor rubbed everyone else the wrong way but who was exceptionally good at his job, what would you do?

In this blog, I recount the story of the dean of a local college who was known for two things--his awesome ability to bring in grant money to the university and his horrible disposition. I'm waiting to see how staffers respond to it--whether they've worked with someone like this and, if so, how it affected their own productivity.

But I'd also like to hear from the bosses themselves. If you were aware of hateful behavior by one of your most brilliant staffers, how far would you let it drag on? Where do you draw the line?