I'll have a go at the teams.
Test Team
1. Graeme Smith (captain)
2. Marvan Atapattu
3. Rahul Dravid
4. Sachin Tendulkar
5. Brian Lara
6. Jacques Kallis
7. Mark Boucher (wicket keeper)
8. Shaun Pollock
9. M.Ntini
10.Anil Kumble
11.Muttiah Muralitharan (Harmison, if Murli refuses to tour)
Test Team Coach - John Wright
Reserves: Herschelle Gibbs, VVS Laxman, I. Ul Haq, K. Sangakkara, Steve Harmison, Shoaib Akhtar, Harbhajan Singh, Chaminda Vaas.
Now, let me discuss my picks.
Smith has proven himself many times, and deserves his spot. His attacking style will gel perfectly with Atapattu's more balanced style of play. The next 3 simply pick themsleves. There is no excuse for dropping any of these 3. Dravid will lend solidity to the innings. Kallis is the perfect person to come in at number 6, and if he gets into a decent partership with anyone, then watch the runs flow.
The 'keeper's choice was a bit dodgy, and I had left it down to Sangakkara or Boucher. In the end, I chose Boucher, because his keeping is significantly better than Sangakkara's. And if a top order lineup like that cannot score 350 + runs, then Sangakkara won't make any difference to the score. His silghtly better batting skills don't justify him a position into the squad.
Now, moving down to the bowlers. It was tough decision between Harmison and Pollock, and although Harmison is at the peak of his form, Pollock's year hasn't been too bad, either. And you will always vote for experience over form in big-match situations. Therefore, Pollock finds himself a place.
Ntini is the best fast bowler today (non-Aussie), so enough said.
Here's the clincher. Why pick either of the 2 spinners? Why should it be "Murli or Kumble"? Why can't it be Murli AND Kumble? These 2 workhorses will bowl 15 overs each on the trot. Such intense pressure from both ends.

Kallis, Pollock and Ntini won't even need to touch the ball. (Okay exxageration, but think about it!) Even if you had to pick the 4 best bowlers in the team, Kumble and Muralitharan would both make the team (remember Kumble's recent 8 wicket haul?).
The unluckiest player to be left out is VVS Laxman. Akhtar is never consistent enough to be picked, neither are Vaas or Harbhajan.
ODI Team
1. Sachin Tendulkar
2. Virender Sehwag
3. Chris Gayle
4. Rahul Dravid (captain)
5. VVS Laxman
6. Jacques Kallis
7. Andrew Flintoff
8. Mark Boucher
9. Shaun Pollock
10. Makhaya Ntini
11. Mutthiah Muralitharan
ODI Team Coach - Dav Whatmore
Reserves: Jacob Oram, Chaminda Vaas, Anil Kumble, Saurav Ganguly, Stephen Fleming, Irfan Pathan
True, the batting is very much Indian-biased, but that is just a coincidence. Tendulkar and Dravid pick themselves into any team. Sehwag and Gayle are the perfect agressive type of batsmen, which will balance the stability and solidity privided to the innings by Laxman and Dravid. Laxman beats Fleming to the post anyday. Kallis, Flintoff and Pollock are the top 3 all-rounders out there, and that leaves Jacob Oram as an unlucky spectator. Pathan is a decent young all-rounder, but he's still lucky to be in the resevres.
Boucher is the only wicketkeeper that comes to mind. At number 8, he would probably have the last 3-5 or so overs to contend with. Such a player needs to be someone that can hit the ball hard, and run quick between the wickets. The reason I don't have Dravi as keeper is simply because it isn't necessary. It's not as if the team lacks all rounders (as is the case with the Indian team). Boucher can be perfectly slotted in at number 8, ahead of Pollock, Ntini and Muralitharan.
The only little hitch is with the post of captain. Saurav Ganguly or Stephen Fleming would have made good skippers, but you don't get chosen to a team based on your captaincy skills. A captain is chosen from among a team of 11 men. And for this particular team, Dravid is the best person to lead.