In Indiana v. Edward, opinion here, the right of a mentally ill criminal defendant to control his own defense was subordinated to the need for a fair trial. If the defendant is competent enough to stand trial (a standard easily met), the defendant may nonetheless be incompetent to represent himself in the trial.
I find the politics of this issue interesting. Some progressive lawyers favor the potentially paternalistic approach. Personally, I was appalled by the spectacle of mentally ill defendants electing to defend themselves (even if I normally place high value on client autonomy).
UPDATE: Nice analysis here, from Scotusblog's Lyle Denniston. I hadn't realized that in this case the state of Indiana had asked the court to overrule Faretta -- the famous case that gave criminal defendants the right to reject appointed counsel and represent themselves. The court declined the invitation, except as to criminal defendants with significantly diminished capacity.
Oddly, this case has normative implications for the prosecutions in Guantanamo (which, following Boumediene, may be de facto defunct). In the Guantanamo cases, the initial rules for the tribunal refused to permit competent detainees to represent themselves -- a rule that Faretta would bar in a domestic setting. Later versions of the rules do permit detainees to decline appointed representation, but with a catch. It appeared as if the tribunal reserved the right to appoint counsel over the detainee's objection if the detainee did not fully participate in his defense.
UPDATE 2: The case brings to mind the farcical trial of Colin Ferguson, who murdered six people on the Long Island Rail Road in 1993 and was deemed competent enough to represent himself. The trial was described here. The transcipt of a Saturday Night Live skit satirizing the trial is here. I remember seeing video clips of the trial and was shocked and ashamed that our courts would let that happen.