At first blush, it does sound really good: After Congress has stuffed a bill full of "earmarks" -- pork projects that most of the 535 pols on Capitol Hill use to send money "back to their districts" -- the president can go through and veto the bad stuff while keeping the main body of the bill, the things that were clearly intended by it.
The up side of the idea is so obvious that it's hard not to just jump on board. But not so fast. There are real problems with it.
First, the efforts so far to implement a line-item veto, including the current one, are unconstitutional. The Constitution says the president can sign the bill or veto the bill; it doesn't provide for an ability on his part keep parts of it he likes and discard the parts he doesn't. If it did, there'd have been no wailing and gnashing of teeth over Bush 43's ridiculous "signing statements," which amounted to nothing more or less than a rough-hewn version of the line item veto ("lesseee, I like this part, check, don't like that part so I won't do it, check").
The Supreme Court ruled on the formal line-item veto back in the Clinton Era. No constitutional amendment, no line-item veto. So the current push is pretty much just a dog and pony show, unless Obama can pull together an FDR-style SCOTUS packing scheme to let him keep it, in which case we've got bigger problems anyway.
Secondly, like "earmarks" or not -- and I generally don't -- they're really just a (more) corrupt spin on the usual legislative process. Congress says it wants to do X. It appropriates money to do X, and directs that the money shall be spent in this way or that way to do X. All that distinguishes an "earmark" from the other "this ways and that ways" is that any given earmark has generally been requested by one congresscritter, presumably because it points some of that "money for X" in his district's or campaign contributors' direction.
If you think that a line-item veto will only affect "real pork," or that it won't quickly become a tool for fuckery, you're naive. It will affect every specific spending directive from Congress.
The political effects aren't hard to forecast: The president's party will get its earmarks, and those earmarks will help its congressional incumbents get re-elected. The opposition party's earmarks, on the other hand, will fall under the line-item cleaver, advantaging the president's party in subsequent elections.
The line-item veto would greatly enhance the power of the presidency. Under the current system, the president has to either accept what Congress hands him, or stare them down in a full-blown veto override fight ... a fight in which he already has an advantage, since it takes 2/3 to force his hand, granted, but a real fight. Breaking issues down to the line-item veto level of granularity would almost certainly give him carte blanche to keep whatever he wants and discard whatever he doesn't want, because at that level of granularity the discipline of (president's) party-line vote is likely to easily outgun any particular issue's constituency.
The presidency is too powerful already. A president who has a House and Senate majority of his own party is even worse. Throw in the line-item veto and what you have is a nightmare -- effectively, a dictatorship.