Authors of a December, 2007 article in Perspectives in Psychological Science discuss how extreme happiness may be related to less than optimal outcomes in measures of success. Their research points to moderately high happiness as being most highly correlated with other measures of success. The article can be found here and below is the abstract. The full text article can only be accessed with a subscription, but there are excerpts of the findings here and here.

Psychologists, self-help gurus, and parents all work to make their clients, friends, and children happier. Recent research indicates that happiness is functional and generally leads to success. However, most people are already above neutral in happiness, which raises the question of whether higher levels of happiness facilitate more effective functioning than do lower levels. Our analyses of large survey data and longitudinal data show that people who experience the highest levels of happiness are the most successful in terms of close relationships and volunteer work, but that those who experience slightly lower levels of happiness are the most successful in terms of income, education, and political participation. Once people are moderately happy, the most effective level of happiness appears to depend on the specific outcomes used to define success, as well as the resources that are available.