Speaking to a packed room at the Sundance reception center after lunch on Saturday, former U.S. Secretary of State Madeleine Albright hit on a wide range of topics. Albright was at Sundance to promote her new book, "Memo to the President Elect: How We Can Restore America's Reputation and Leadership."

"I have to say one of the very best things anybody has ever said to me is when Robert Redford says he is my friend," said Albright upon taking the podium. She clutched her hand to her chest. "Who would ever have thought! That is a great pleasure. ... You are my permanent heartthrob."

Albright said she wrote her third book because whoever becomes the next president of the United States will affect the whole world. She spoke for 30 minutes without any notes, touching on an array of national security topics and then answered questions for another 30 minutes.

She said she teaches a course at Georgetown University about the national security toolbox.

"Despite the fact that we are the most powerful country in the world, the truth is that the toolbox does not have a lot of tools," she said.

Economic tools, diplomacy and military tools are among the limited choices, she said. While President Bush has preferred the military tool, the next president must know how to use a combination of all the options.

"I disagree with the term war on terror," she said. "It is not a classical war, it did not have a classical beginning and it will not have a classical ending."

Those who fight against the U.S. are murderers and "they are not warriors and by talking about a war on terror we have given them a mythical status in their own societies."

Even the Bush Administration has said the war in Iraq has created more terrorists, she said.

Nuclear proliferation will be one of the issues the next president will have to face, as well as restoring respect for democracy. Everyone in the world wants the liberty to make decisions about their own lives, she said, but democracy cannot be imposed.

"You cannot impose democracy, that is an oxymoron," she said of Bush invading Iraq, noting the invasion has since hurt U.S. efforts to support democracy in other countries because U.S. motives are now looked on with suspicion and other countries are wary of U.S. imperialism.

There is also a widening global gap between the rich and the poor, and "while there is no direct line between poverty and terrorism, and I underline that, it does not take a lot of imagination" to know that when large numbers of people are marginalized in their societies, that becomes a global security concern.

Whether or not other countries agree with how the U.S. got into Iraq, that country's stability now affects not only the U.S. but the world and the rest of the world is going to have to help reconstruct that country -- "and that means we can't have all the reconstruction contracts" -- and train Iraq to stand on its own, she said.

"I have gone down as saying Iraq -- and this is a big statement -- is the biggest disaster in American foreign policy ever, in terms of unintended consequences. It is worse than Vietnam," she said.

All Americans owe a debt to U.S. forces who protect our country, she said, but there is no longer a military solution in Iraq.

Meanwhile, there are important events that are escaping U.S. attention on the African continent and in Latin America, she said.

"Hugo Chavez [president of Venezuela] is certainly growing an anti-American alliance based on oil," she said.

Chavez is putting together a group of those who have oil and want arms and those who want oil and have arms, she said.

And inside America there is increasing disquiet with rising gas prices, food prices, energy security, global warming and other issues.

Before taking questions, Albright ended her speech by saying now that she was not secretary of state, she could actually answer questions. But she, laughing, declined to answer the first audience question of who the five best minds are to help solve America's problems.

"That is not a question I'm going to answer," she said with a laugh, noting she is working with many intelligent people.

When asked about Obama's foreign policy ability compared to McCain, Albright said McCain is a "fine person" and a war hero but he is "a 20th century figure who looks at issues through an old prism" whereas Obama "will take America into the 21st century."

When asked about Bush's reversal this week on the federal ban on off-shore drilling, Albright said she was very concerned about the issue and that energy security cannot be answered by more drilling. More must be done to invest in alternative fuels "but we did not get into this mess overnight and we will not get out of it overnight," she said.

She predicted that Obama, if elected, would have a honeymoon, albeit a short one, with the American people and cautioned those who might vote for him not to "expect miracles. It will require a president that actually tells us the truth and treats us as adults rather than asking us to do more shopping."

When asked if she could pinpoint what went wrong in Hillary Clinton's campaign, Albright said Clinton "broke through and did a very good job. I think Senator Obama ran a better campaign. He really plugged into something new."

Seven years after the Sept. 11, 2001 terrorist attacks, what is troubling is that Osama bin Laden has not been found despite thousands of people looking for him, she said.

The Bush Administration, when taking over from the Clinton Administration, "did not take it [terrorism] seriously enough," she said, noting the Bush Administration did not believe terrorism was taking as much effort as it had been consuming. "The Bush people -- they say this, so I am not making this up -- they were practicing ABC, 'Anything But Clinton' so I think what we [the Clinton Administration] were very focused on, they did not want."

When asked about border control, Albright said every nation has the right to control its borders, but she does not believe in fences "because that is what the Communists do." She said she was a legal immigrant to the U.S. in 1948 and believes immigrants are essential to the economy and add much to the country. She said a comprehensive immigration policy that is generous to those already here is needed.