Being Dutch, I've seen quite a few club legends taking over as a manager at the club they were successful as a player in recent years. Van Basten at Ajax, Frank de Boer at Ajax and Philip Cocu at PSV come to mind. Van Basten was completely out of his depth even though he was pretty successful at the Dutch National team before that.
Cocu has looked completely out of his depth and PSV are having their worst season ever. Frank de Boer is brilliant though, now winning his 4th consecutive league title. But he was born to be a coach, just natural talent, and they reorganized Ajax on Cruijffs' advice, making Overmars Director of Football, Van der Sar marketing director and he will be future president of Ajax if he turns out to be suited for the club, so it's a perfect situation for them. Guardiola did really well, but he coached Barca B and like Frank de Boer, he's just born to be a coach. Giggs doesn't strike me as that type.
All in all, I would say Giggs would be too much of a gamble, odds on he'll fail for sure. But for the time being and perhaps in a couple of years, who knows.
Not worried at all that Van Gaal will be a disaster. Although I am Dutch, I don't really like him. He tried to betray Ajax two years ago to get a job as president/director there and basically the man is a nut-job.
But I must say that without a doubt LVG would be the best thing for us, I bet my life on it he'll have us competing for the league title next year, the man is a bit paranoid and can be very stubborn, but he truly is a world class manager and would add a lot more to United than his negatives will cost us.