I'm too good at my job

I have been working for a large corporation for about 4 years. My relationship with the vice president is great; I feel he is smart and respectable. My relationship with my supervisor however, is a little rocky. She is a flake, routinely calling in to work, crying over the slightest criticism, complaining incessantly, and the quality of her work is terrible.

In January I applied for a new position in the company, I interviewed for the position twice and both interviews went well. After a couple of weeks I was called by the vice president in the new department and told that they selected another candidate because they had more experience. I was disappointed, but not heart broken. The vice president in my current group took me out to breakfast as a morale boost and I appreciated it greatly.

Now several months later the supervisor in the group I had applied to work in approached me confidentially and told me that I was the candidate they originally wanted, but my current vice president would not allow me to move. He told me they have another position opening up and they want to fill it with me, but are concerned about whether or not it will be possible.

I am not sure how to feel about this. I am frustrated because my vice president held me back without even giving me an explanation. I am worried that I will not be able to move anywhere within the company because my supervisor is a flake and my vice president relies on me too much. What should I do?

You can read my answer over at BNET.