About Sehwag, you can't drop him or demote him just because he's had aslump in form. He's got the striking power that every other batsman in the side lacks, and can give the team a flying start, which is important when opposition teams score so quickly then against the Indians. They missed Sehwag in the Abu Dhabi ODI, when the pair of Dravid and Uthappa scratched at three an over, then both got out cheaply. Given his style, he's bound to get out early very often, but when he gets in, he can make quite an impact.
Having Irfan at three through seven is not such a bad idea, but he has to play to plan. His success against the Lankans late last year shows what he can do, when in good form. It's cynical to say that sending him avobe eight is like throwing a wicket away, because if you send in a specialist batsman, you could end up wasting several dot balls, when the opposition is scoring freely. He's had a good beginning so far, but still finding his feet, and worth continuing, even if not at three all the time. Moreover, they can also sneak in a fifth bowler, especially one like Powar or JP Yadav or Joginder Sharma or Bangar, who can also score a chunk of runs, coupled with Irfan's, which can make a difference.
The one thing they have got wrong is having Dravid opening the innings, especially in ODI's. Dravid is a slow scorer at the start. He is not even an opener. That will put excess pressure on Sehwag, already under pressure to score at a healthy strike rate. Moreover, if Dravid is out early, which will often happen if he opens, it's a big blow to the batting side. Instead, a Test opener at the top will serve the purpose better, and also keep the interest of the Test team safe. Not to mention, the persistence of Venugopal and Agarkar is questionnable, since the team can afford to replace both with players they need– a Test opener and a tearaway pacer or run-scoring medium-pacer.