It's a difficult one, but it wouldn't be the first time that someone has been chosen to coach who has had a 'colourfull' history. Leigh Matthews resume is probably as 'colourfull' as anyone else's but he has turned into one of the really respected coaches.
As for players with bad histories, if a club has good values and a strong leadership team then a player like Pike can still make a good contribution ala the kangaroos and Lions, but unfortunately at Melbourne I don't think our current leaders are in that class (comparing them to blokes like Archer). It would have to be on a case by case situation with a demonstration that they have sorted themselves out or at the very least desperately want to.