Gerald Ford got a pretty bum rap from a lot of people when he was President and things haven't got much better for him as the history books begin to be written. A lot of literature on the Cold War and American politics doesn't even give him much of a mention. Chapters typically skip from "The Nixon Presidency" straight to "The Carter Presidency".
There were certainly a lot of obstacles to Ford being very original or bold in his policies. He didn't have any electoral base outside the Fifth Congressional District of Michigan, and hence doubts could be raised about his mandate. Then there was the fact Watergate had just ended, and to restore the respectability of the Presidency Ford felt he had to sew the nation's fabric back together rather than ripping it further apart. This is why he called his autobiography A Time to Heal.
Then there were a few decisions he made that turned out to be unpopular, and ended his brief romance with the American people. At first just about everyone loved this straight-laced Congressman, who was seen a conciliator who would abandon Nixon's high-handed manner of dealing with the public and Congress. And indeed Ford did do this. Ford's tenure was uncorrupt and marked by an honesty toward the American people, often in the face of vitriolic abuse from journalists. The "nasty CIA activities" mentioned by pinguoin above did not take place during Ford's tenure, rather there was a Congressional and executive investigation of abuses under past Presidents.
Nevertheless, major events took place during Ford's tenure. South Vietnam fell to the Communists, bringing to a tragic end over a decade of American foreign policy. Ford reacted to the event with restraint, appealing to the Congress to supply aid to allow the Vietnamese to defend themselves. When none was forthcoming, he declared the war over so far as the United States was concerned and called for a debate over the future without recriminations. Most people in the United States wanted to forget the Vietnam War as quickly as possible, and most moved on.
His foreign policy in general was pragmatic, and he gave no dynamic new direction to the nation's international affairs. Here he most strongly continued the Nixon legacy, especially with Kissinger by his side. This was natural, as Nixon and Kissinger had crafted a hugely effective foreign policy. Ford continued to pursue a relaxation of tensions with the Soviet Union (detente) and tried to reach agreements on bilateral trade and arms control. He came under criticism from the neoconservative movement which was just coalescing around Commentary magazine, who wanted him to employ a 'muscular Wilsonianism'. Their call for an ideological renewal and a confrontational stand against the Soviet Union, which eventually ended the Cold War, would have been too divisive for the troubled domestic scene of the mid-1970s and would have to wait for Ronald Reagan.
In domestic policy, Ford shared the typical preoccupation of Republicans in the late twentieth century - cutting government spending and cutting government programs which he felt were unneccesary. Ford didn't throw rhetoric around quite so freely as Reagan, but he too believed that the Congress needed to control its spending and that masses of taxes and regulation were strangling America. However, Ford was faced with one of the most militant Congresses in history, newly emerged from Watergate victorious and baying for more blood. The mostly Democratic legislative attacked the CIA, saw Ford appear before the Senate Judiciary Committee, and tried to make foreign policy by legislation, or at least undercut the administration's efforts to make a coherent foreign policy.
That Ford managed to hold things together when faced with all this makes him worthy of praise. A brief look at his major decisions likewise does not give an unfavourable impression. Firstly, he pardoned Richard Nixon. This may sound like a terrible thing to do (many people at the time certainly thought so), but in reality there was little point continuing to hound Nixon, who was near death with phlebitis (he subsequently recovered). On top of that, it had become clear that it was impossible to get anything else done while the Nixon issue was still unresolved. Nixon was all the press wanted to know about and many politicians still devoted too much time to attacking or defending him. By pardoning him, Ford attracted a great deal of flak toward himself but allowed the Republic to move on.
Secondly, his foreign policy decisions were generally good. While the process of detente ticked on, Ford showed he was willing to defend American interests abroad. He successfully rescued the crew of the SS Mayaguez when they were kidnapped by Communist Cambodia, and he sent a stark warning to North Korea with Operation Paul Bunyan. He also tried to intervene to stop Soviet dominance of Angola, although eventually Congress put paid to his efforts. While detente as an idea was ultimately doomed, it was not a bad thing that it at least had been tried. Although he is sometimes blamed for Indonesia's invasion of East Timor, archival evidence does not suggest he was ever involved in any decision-making process on the issue. At most he knew of Indonesia's intention and did nothing to stop them - but the question of what exactly he could do has to be raised.
Eventually Ford lost the election to Jimmy Carter in 1976. He'd had a tough few years, with a coalition of neoconservatives, Vietnam War liberals and Cold War conservatives arranged against him. He managed to emerge from this adversity with his reputation mostly intact, even his political opponents admitting that he was a good man who had tried to do his best for the country. Most crucially of all, he had managed to oversee the passage of Watergate and the Vietnam War into the nation's history. That he weathered the extreme trauma of the mid-1970s and led the American Republic intact and vibrant into a better era so quickly perhaps suggests that his reputation is due to be restored.