I feel I should weigh in on the issue at hand (being hands down the best Irish poster (come at me)). Was Kidney wrong to displace O'Driscoll as captain? Well, possibly not. It's his decision, and given O'Driscoll's injuries over the past season or two it makes sense to take it off him. If you can't rely on him to be fit and featuring regularly then he shouldn't be the go to guy.
Did he handle it well though? Not at all. Firstly, O'Driscoll is the most experienced and respected player in the Irish squad. The way to break the news to him is not through a squad announcement or a phone call. You have a meeting with him, explain the situation, and make it clear that he's still in his plans. Then, when you go to the media you don't be so bloody cryptic. There's no need to give an already hostile supporter base more reason to take a dislike to you.
So, not a bad call, but very poorly handled.