Another Fortune Most Powerful Woman — a longtime member of our annual Power 50 list — is leaving the corporate world. Susan Desmond-Hellmann, who was Genentech’s (DNA) president of product development, is heading to the University of California San Francisco as chancellor.

Desmond-Hellmann’s departure from business’s upper echelons (She ranked No. 13 on Fortune’s 2008 Power 50 list) adds to the trend of top women execs leaving corporations and deciding not to jump back in. Among the departed: former Procter & Gamble (PG) president Susan Arnold, former Pepsi-Cola North America (PEP) CEO Dawn Hudson, former Yahoo (YHOO) president Sue Decker, and the trio who once were the most renowned women on Wall Street: Sallie Krawcheck of Citigroup (C), Zoe Cruz of Morgan Stanley (MS), and Erin Callan of Lehman Brothers, whose recent leave from her new employer, Credit Suisse Group, is looking like it may be permanent.

All these onetime stars are on the sidelines except Hudson, who recently joined Parthenon Group, a Boston-based strategic advisory, as vice chairman — a three-day-a-week commitment to rachet down her stress level, Hudson says.

This decision by Desmond-Hellmann, 51, isn’t so surprising given Genentech’s fate: in March, Swiss drug giant Roche won a year-long battle to acquire the 44% of the biotech company that it didn’t already own for a whopping $46.8 billion. Chief executive Art Levinson, a Desmond-Hellmann fan who promoted her from clinical scientist to chief medical officer to EVP to president, lost the CEO title and remains chairman. Questions abound regarding whether Roche will be able to retain Genentech’s entrepreneurial culture. That culture has helped Genentech become not only the best company in biotech but also one of Fortune’s Best Companies to Work For.

A onetime practicing oncologist who never imagined she’d climb the corporate ladder, Desmond-Hellmann is returning to her roots. She started her career at UCSF and, she says, “my heart has never left it.” She can’t talk at length about her move until the California Board of Regents approves her appointment. Stay tuned to Postcards next week to hear more from Desmond-Hellmann.

Meantime, have a great weekend!

by Patricia Sellers

Dawn Hudson spent more than a decade chasing stretch goals at PepsiCo (PEP). She headed sales and marketing at Frito-Lay, the consumer giant’s snack unit. She led marketing at Pepsi-Cola North America and ascended to CEO of that $5.5 billion business.

That job turned out to be Hudson’s ceiling inside PepsiCo, where chairman and CEO Indra Nooyi has put her own stamp on the company. Hudson (who ranked as high as No. 41 on Fortune’s Most Powerful Women list in 2007) left Pepsi in January of last year. Since then, headhunters and others have wondered what big job she’ll land next.

It took Hudson 14 months–of silence, self-reflection, and ducking press inquiries—to decide that her new gig will be at….drum-roll…a firm you might not have heard of: the Parthenon Group, a Boston-based strategic advisory outfit. She’ll be vice chairman, working just three days a week.

What gives? Like a lot of women–and men too lately–who have come close to reaching a pinnacle in business, Hudson, 51, decided that shooting for bigger and bigger jobs is simply too stressful. And not worth the price.

“I was neglecting life,” she says about her time in the Pepsi pressure-cooker. “It took six months for me to realize that there’s some great life out there to be lived.”

Not that she’s idled these past 14 months. She serves on the boards of Lowe’s, the home-improvement retailer, and Allergan, whose restorative medical products range from breast implants to Botox to Refresh eye drops. Hudson got her own shot at reinvention as soon as she exited Pepsi: She stepped up to chair the LPGA–and then whittled her golf handicap to 12, from 15.

A serious athlete ever since her Dartmouth days, Hudson played in five competitive tennis leagues and a golf league–yes, simultaneously–at one point during her time off. “I transferred my 24/7 work ethic to sports,” she says, adding that she paid for it. She developed plantar fasciitis, or heel spurs. “I played through it.”

Her onetime boss, former PepsiCo CEO Roger Enrico, gave her the best advice about rerouting her career: “Roger said, ‘Whatever you do, you’re going to do passionately. So make sure you join a group of people who you really want to spend time with.’”

And Ann Fudge, a former top exec at Kraft Foods (KFT) who later headed Young & Rubicam Brands (and now sits on the General Electric board), was also helpful. “As her career progressed, she fought the urge to overload herself at the expense of her family and personal time,” Hudson says. “Ann told me that you have to follow your gut, take a deep breath, make the call to say no to something. And if it turns out to be the right call, you’ll wake up in the morning with a great sense of relief and satisfaction.”

That’s what Hudson did–but only after considering opportunities in consumer goods and retail. She says she came close to taking the top job at one large company owned by private equity. “But then I thought, what’s really going to be different this time?”

Parthenon appeals to her, she says, because she’ll have the chance to work with lots of companies in lots of areas–strategy, marketing, IT–and reach beyond business too. Parthenon has a philanthropy practice, and she plans to help the firm build a sports practice as well. She’ll start at Parthenon in a month or so. First things first: She promised to take her 11-year-old daughter (the younger of two) skiing in Colorado, and she’s taking “a mystery trip” with her husband, Bruce Beach, who wants to surprise her. (She’ll find out where the trip is when she gets there.)

So much for Hudson’s spot on Fortune’s Most Powerful Women list. Does she care? Hardly. “I’m in control now,” she says. “It’s a different definition of power.”

P.S. Hudson perpetuates the trend: Powerful women are opting out. Procter & Gamble (PG) president Susan Arnold quit her post two weeks ago, one day after she turned 55. Arnold needs to “decompress,” she told me, before she even thinks about what to do next. Former eBay (EBAY) Meg Whitman left business to run for governor of California. (She’s hardly decompressing, though! Read my current Fortune cover story.)

And three execs who used to be the most powerful women on Wall Street–Citigroup’s (C) Sallie Krawcheck and Morgan Stanley’s (MS) Zoe Cruz and Ellyn McColgan–are all without jobs now, while Erin Callan, the Lehman Brothers’ CFO who landed at Credit Suisse, is taking a leave of absence–supposedly to ease her stress. What do YOU think? Will women rise again when the business world gets out of crisis?

“You can’t be naive about the press. I had a lot of positive exposure but didn’t recognize the opportunity for significant negative exposure. Exposure becomes celebrity, and you get a persona.”

– Erin Callan, former Lehman Brothers (LEH) CFO and now head of global hedge fund business at Credit Suisse (CS), in Katie Benner’s exclusive Q&A with Callan in the current issue of Fortune. In her first interview since leaving Lehman in July, Callan said her naivete about the downside to the media spotlight was one of her mistakes.

We’ve spent the last three months slicing and dicing the accomplishments and career histories of the most powerful women in business — far too many facts and figures to fit into our Most Powerful Women package in the magazine. Here are 10 intriguing facts that we couldn’t find space for in print:

Youngest woman to ever appear on the list: Marissa Mayer, VP of Search and User Experience at Google (GOOG). At 33 years old, she lands in the No. 50 spot. Before Mayer, the youngest MPWoman ever was Sallie Krawcheck, age 37 in 2002 when she was CEO of Sanford C. Bernstein and debuted at No. 42.

Highest-profile dropoff: Krawcheck, who last week quit her CEO post at Citigroup (C), where she was chairman and CEO of Global Wealth Management.

Highest-ranking returnee: Safra Catz, co-president of Oracle (ORCL) at No. 16. Catz last appeared in 2005, at No. 49. She has impressively overseen 40-plus acquisitions and earned her way back to a top spot.

Highest-ranking newcomer: Susan Chambers, EVP of the Global People Division at Wal-Mart (WMT). Wal-Mart is not only the largest company in the world, it also employs the largest private workforce (over two million!), earning Chambers her spot at No. 25.

Non-CEOs in the top 10: Susan Arnold, No. 7, president of global business units at Procter & Gamble (PG); Oprah Winfrey, No. 8, chairman of her Harpo Inc. multimedia empire; and Ursula Burns, No. 10, president of Xerox (XRX). Burns will likely become CEO of Xerox next year, with Anne Mulcahy staying on as chairman.

Biggest leap at the top: Ellen Kullman, up from No. 25 to No. 15. Last week, she was named president and CEO designate at DuPont (DD). Other major jumps: Heidi Miller, who heads J.P. Morgan Chase’s (JPM) treasury and securities services unit, from No. 27 to 17, and TJX (TJX) CEO Carol Meyrowitz, from No. 31 to 19. Her low-price retail chains are winning over shoppers in this sagging economy.

Consumer-goods bosses in the top 10: PepsiCo. (PEP) CEO Indra Nooyi (No. 1), Kraft (KFT) CEO Irene Rosenfeld (No. 2), Avon (AVP) CEO Andrea Jung (No. 6), P&G’s Arnold (No. 7), and Sara Lee (SLE) CEO Brenda Barnes (No. 9).

Only MPWoman who doesn’t run a major business or direct the strategy of a corporation: securities analyst Meredith Whitney (No. 35). Oppenheimer & Co.’s hugely influential market mover made the August 18 cover of Fortune for her prescient predictions of plummeting bank stocks.

Blasted off the list: Morgan Stanley (MS) co-president Zoe Cruz (No. 16 last year) and VMware (VMW) CEO Diane Greene (No. 22 last year) were fired.

One woman worth watching, still: Erin Callan, whom we identified as a 2007 “woman to watch,” lost the CFO job at Lehman Brothers (LEH) in June and found refuge at Credit Suisse (CS), where she now heads the firm’s global hedge fund business. Callan didn’t make our list this year, but she certainly knows power, as she demonstrates in her first interview since leaving Lehman. Read Katie Benner’s exclusive Q&A. – Jessica Shambora

Coming on Monday…more turmoil in the markets? Let’s hope not! Here’s one thing you can bet on: Fortune’s 2008 Most Powerful Women in Business list.

That’s right, we just sent it to the printer, and you should see it online Monday morning. You’ll see surprises. I can’t give too much away (the women who made the list are being called this afternoon with the news that they made Fortune’s rankings). But I can tell you that this year’s list includes a newcomer who is the youngest woman ever in the MPWomen’s 11-year history. (Guess!)

Overall, this year’s MPWomen list turned out to be more competitive than last year’s — indeed, than ever. Even as women have fallen off the ladder so visibly (on Wall Street most of all: Zoe Cruz at Morgan Stanley (MS), Erin Callan at Lehman Brothers, Sallie Krawcheck at Citigroup (C), as I detailed Monday in “Behind Sallie Krawcheck’s exit at Citi“), the bar for making Fortune’s list rose to about $7 billion in revenues, the highest level ever. That’s a general threshold, not an automatic ticket in, since we examine the direction of the business and the arc of the woman’s career too.

So, even Fortune 500 CEOs can get bumped off the list. It happened this year, in fact, with a woman chief whose company generates $24 billion in sales, but has a stock-market capitalization of less than $1 billion — and a sinking stock to boot. Can you guess who?

Will PepsiCo (PEP) CEO Indra Nooyi be No. 1 on the list for the third year in a row? To find out that answer and more, check Postcards — and CNNMoney.com and Fortune.com — on Monday to see the new list unveiled. This year’s MPWomen package, our strongest yet, includes a story that I wrote about Silicon Valley’s rising stars and their unique social network, which powers their businesses dealings and their careers. We also have an unprecedented volume of online content: career advice and other insights from the top women at eBay (EBAY), Google (GOOG), Yahoo (YHOO), Facebook, and more.

One more bonus: Erin Callan talks for the first time since she left the CFO job at Lehman Brothers in June. Now that’s a Fortune exclusive!

Sallie Krawcheck

Sallie Krawcheck is leaving Citigroup (C). The exit of Krawcheck, chairman and CEO of the bank’s global wealth management unit, stems from disagreements with Citi CEO Vikram Pandit and a decision, made by him last week, to shrink her responsibilities inside the company.

Sources close to Krawcheck and Citi say that the tension revolves mainly around the amount of money that Citi owes clients who invested in hedge funds and auction-rate securities that turned out to be toxic investments. Krawcheck argued in favor of Citi’s responsibility to pay clients back, in effect, for defective investments distributed by her brokers and bankers. Citi’s multi-billion-dollar auction-rate securities settlement, announced in August, caused a rift in her relationship with Pandit, who according to one source preferred to take a tougher line with clients. The settlement requires Citi to return to individual investors, small businesses and charities all $7.5 billion that they invested in auction-rate securities via Citi.

Citigroup declined to comment on the Krawcheck situation. But sources confirm that last week, Pandit moved to take away her CEO title and operating responsibility for the wealth management unit, leaving her as chairman with client responsibility. She didn’t like that. Then, this morning, news swept through Citi that the unit, instead of reporting to Pandit, would be overseen by John Havens, who is CEO of Citi’s institutional clients group. A release this afternoon will announce Krawcheck’s exit and her replacement as CEO of global wealth management: Michael Corbat, who currently heads the corporate and commercial bank within Citi’s investment banking division.

I had breakfast with Krawcheck late last month. Not that she clued me in to her impending departure, but I’m not surprised nonetheless. We talked a lot about Wall Street’s woes and the fact that women are not progressing there. Of the trio of Wall Street’s most powerful women, in fact, she was the last one standing. Lehman Brothers (LEH) CFO Erin Callan lost her job in July and is now at Credit Suisse (CS), while Morgan Stanley (MS) president Zoe Cruz was fired by her boss, John Mack, late last year.

Tagged “the survivor” by some, Krawcheck seemed loyal to a fault. Recruited to Citi from Sanford Bernstein in 2002 by former CEO Sandy Weill, she is one of the few senior execs (besides senior counselor Bob Rubin and chairman Win Bischoff) who stayed through those six years. Just before she arrived, she was heading stock-research outfit Sanford Bernstein and was the subject of a Fortune cover story,  “In Search of the Last Honest Analyst.” As chief of Citi’s Smith Barney brokerage unit, she cleaned up problems related to its conflict-of-interest scandals.

Another cover, “Can Sallie Save Citi?,” followed in 2003. Her star dimmed as she took on the dual role of CFO and head of strategy the following year. Last month, she wouldn’t share details about her struggles there, but she was known to clash with then-CEO Chuck Prince on key decisions. The Citi board ousted Prince late last year and replaced him with Pandit.

Going back to running a business unit — Citi’s private bank plus Smith Barney — was a relief for Krawcheck. Her global wealth management division brought in $13 billion last year. Its profits are expected to be down this year, but not dramatically, so it’s a relative safe haven amidst Wall Street’s bigger troubles.

Her latest comedown is quite a turn for the star once seen by some as a possible CEO of Citi someday. She doesn’t have another job lined up, but she has a long runway ahead and broad perspective on the business world, from her Citi assignments and her role on the board of Dell (DELL). Says one high-level Citi exec: “The people who work with her love her. Whoever gets her will be lucky.”

Another prominent woman made a move Monday: Pam Nicholson, No. 44 on Fortune’s Most Powerful Women in Business list, was named president and COO of Enterprise Rent-a-Car.

Enterprise may not be on your radar because the company is privately held. But it’s remarkable in many ways: Enterprise is the world’s largest rental car company, with revenues approaching $13 billion. (You thought Hertz and Avis were No. 1 and No. 2? Enterprise was bigger even before it bought National and Alamo last year, and now it leaves those more famous names in the dust.)

Not only is Enterprise growing. It hires more entry-level employees than any other in the U.S. Just behind it on CollegeGrad.com’s 2008 survey of the biggest recruiters, released in June: AmeriCorps, Walgreen (WAG), the IRS, and Progressive (PGR), the insurance company. Target (TGT), Lockheed Martin (LMT) and Bank of America (BAC) rank among the top 20. But Enterprise, which puts new hires to work scrubbing cars, recruits thousands more entry-level employees each year than any Fortune 500 giant.

Nicholson, 48, launched her career like most any successful Enterprise exec: behind the sales counter, as a management trainee. She started in the company’s hometown of St. Louis after graduating from the University of Missouri with a BA degree. Now she’s considered a contender for the CEO position.

My colleague Carol Loomis’ 2006 story about Enterprise details the the company’s unusual low-cost business model – operating mainly outside of airports – and down-to-earth Midwestern culture. This culture is all about hard work, intense customer focus, and an innovative incentive pay system. Branch managers are compensated based on the profit at their individual operation. If you’re a great entrepreneur, you thrive.

At a time when turmoil and ugly politics have swirled around so many corporate suites – and helped topple powerful women such as Zoe Cruz at Morgan Stanley (MS), Erin Callan at Lehman Brothers (LEH) and Pat Russo at Alcatel-Lucent (ALU) – it’s good to see a woman climb the ladder safely, the old-fashioned way.

Pat Russo’s planned resignation as CEO of telecom-equipment giant Alcatel-Lucent (ALU) isn’t so surprising given her unending tide of challenges: intense industry competition, out-of-control costs, cultural clashes following the 2006 merger of the American and French companies. This simply wasn’t manageable for a chief who, despite her impressive record as a turnaround champ at IBM (IBM) and then AT&T (ATT), didn’t satisfy investors on either side of the Atlantic.

Some might even say that it’s amazing Russo, who ranked No. 4 on Fortune’s international Most Powerful Women list, has hung on so long. I recall being in a small conversation six years ago with Jack Welch, General Electric’s (GE) former chief, and some top execs at a Fortune Leadership Forum in Chicago. Welch was riffing about the toughest jobs in America, and how quite a few of them were in the hands of women. He mentioned Russo, Xerox (XRX) CEO Anne Mulcahy, and Carly Fiorina, then Hewlett-Packard’s (HPQ) chief and No. 1 on Fortune’s U.S. Most Powerful Women list. In Welch’s view, all three women were tempting fate as they strived to complete incredibly difficult financial and cultural turnarounds.

Now, of course, two of these women bosses, Russo and Fiorina, have fallen while the other, Mulcahy, has brought Xerox back from the brink of bankruptcy. (For a terrific take on Mulcahy and Ursula Burns, her president and heir apparent, read my colleague Betsy Morris’ Most Powerful Women cover story last year, “Xerox’s Dynamic Duo.”) All in all, 2008 has been a bummer year for women on the pedestal. Besides Russo, Morgan Stanley (MS) co-president Zoe Cruz, Lehman Brothers (LEH) CFO Erin Callan, VMware (VMW) CEO Diane Greene, PepsiCola (PEP) North America chief Dawn Hudson all fell. And let’s not forget Hillary Clinton.

The pattern makes the survivors all the more impressive. Amidst the bad news the past couple of days, you might have missed some news about MPWomen who have scored: Kraft (KFT) CEO Irene Rosenfeld beat quarterly profit expectations and raised Kraft’s forecast–and the stock popped. Pearson (PSO) CEO Marjorie Scardino, No. 3 on Fortune’s international MPWomen list, also pleased the street. And as retailers across America struggle and plunge into Chapter 11 (Mervyn’s is the latest likely casualty), one MPWoman retailer is quietly sailing along: Carol Meyrowitz, the CEO of TJX (TJX), which owns TJ Maxx and Marshalls. TJX shares are up 23% in the past year.

The Most Powerful Women franchise, just a decade old, is already Fortune’s second biggest after the Fortune 500. Amazing, isn’t it? This fact attests to the power of women in a year when so many powerful women – including Hillary Clinton and Morgan Stanley’s (MS) Zoe Cruz and Lehman Brothers’ (LEH) Erin Callan - got so close to the top and then fell. Even so, the power of women in business and beyond is clearly expanding. And Thursday we celebrated with the second of our nationwide MPWomen dinners, this one in San Francisco.

Quite a turnout. We had the top women from companies as diverse as the Gap (GPS), Wells Fargo (WFC), KPMG (thank you, KPMG!), and the Silicon Valley gang including Facebook COO Sheryl Sandberg, senior venture capitalists from Kleiner Perkins, Google (GOOG) Asia-Pacific/Latin America boss Sukhinder Singh Cassidy, and eBay (EBAY) SVP Stephanie Tilenius. She has run just about every part of eBay and could lead the entire company someday. That’s what former eBay CEO Meg Whitman has told me.

Cassidy and Tilenius, along with new lululemon athletica (LULU) CEO Christine Day, were on the Rising Stars panel that I led before dinner at the wonderful SF restauarnt Jardiniere. As usual, the questions from the audience were much about how successful women display power. I asked the three up-and-comers whether they believe that the acceptable band of behavior is narrower for powerful women than for men. Essentially, they said no – though Tilenius remarked that she wished that Hillary Clinton had campaigned more like a woman than a tough guy.

On this issue of female leadership style, there’s a generational divide. The debate began as soon as we sat down to dinner. I was sitting with Genentech (DNA) president Susan Hellman, Cisco (CSCO) chief technology officer Padmasree Warrior, SAFECO CEO Paula Rosput Reynolds, and other influential women spanning two generations. The older women generally insisted that they, throughout their careers, have been forced to behave a certain way – to rein in their aggressiveness and tone down their style.

This is true particularly in financial services. But Genentech’s Hellman, a former practicing oncologist who is now the most powerful woman in pharma, said that in her business, women aren’t so constrained. In science and medicine, the guys usually don’t even notice your gender. If you’ve got brains, you succeed.

P.S. Do you think that the band of acceptable behavior is narrower for powerful women than for powerful men?

“If you have a stretch assignment, just take it.”

– Sallie Krawcheck, chairman and CEO, Citi Global Wealth Managment, said this to Fortune’s Geoffrey Colvin in 2006. Krawcheck was Wall Street’s rising star after former Citigroup (C) CEO Sandy Weill recruited her from Sanford Bernstein in 2002 to help lift Citi’s reputation. Citigroup’s troubles have dimmed her prominence, but since two of Wall Street’s other most powerful women, Erin Callan and Zoe Cruz, have lost their big jobs at Lehman Brothers (LEH) and Morgan Stanley (MS), respectively, Krawcheck once again appears to be the most powerful woman on Wall Street.

Citigroup announced earnings this morning, reporting a $2.5 billion loss, which eased investors worries. The stock is up on the news.