While I understand the sentiment of fighting the death penalty, and while I do think that sometimes death is too good for really bad offenders, I think there are overriding factors in this case. For one thing, this is what Iraq decided, not us. If hanging is their method of execution, then I'm hardly going to argue with it being applied to Saddam.
And for another, the death penalty is really the only safe way to assure that our Saddam problems don't continue. Seeing as Hussein was, for many years, the leader of a country who gained many followers, it is quite plausible that certain groups of people would want to break him out of prison. This is more true in his case than in most others. Considering the great destruction he caused when he was in power, I don't think we can take the risk of him ever being free again, even if it's relatively small.