> 1. change SNESVI to support general complementarity constraints because only 
> doing box constraints on state variables is lame

Okay; and how do you want to do this?  You need to write out the corresponding 
KT system
and then you just have a box constrained problem.  One can make it easier to 
write the
KT system, but then you have to precondition the KT system.

There are some reformulations for polyhedral constraints, but they are, in my 
opinion,
a bit unwieldy.

> 2. have a mode to solve the system in the full space, instead of eliminating 
> the semi-smooth variables (which produces the bad conditioning)

There are all these options in the TAO methods.

Cheers, Todd.

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