Powerful upper houses occur in federal states, and they are powerful because their senators are elected to represent a discrete interest. Since Britain is not federal, it is not clear whom the elected peers would be there to represent. And, without a veto, they would be in the odd position of having a mandate from the electorate but not much chance to exercise it.
The government needs to decide if it wants a house of experts able merely to ask the Commons to think again on legislation; or a powerful democratic counterbalance to the elective dictatorship of the British parliamentary system. Only then will the mix and method of appointment and election suitable for the Lords become apparent. Meanwhile, Jack Straw's attempt to force through the least-unpopular option in his reform Bill should be scrapped.