VERB (3)

1. help to readapt, as to a former state of health or good repute;
- Example: "The prisoner was successfully rehabilitated"
- Example: "After a year in the mental clinic, the patient is now rehabilitated"

2. reinstall politically;
- Example: "Deng Xiao Ping was rehabilitated several times throughout his lifetime"

3. restore to a state of good condition or operation;

The Collaborative International Dictionary of English v.0.48:

Rehabilitate \Re`ha*bil"i*tate\ (r?`h?*b?l"?*t?t), v. t. [imp. &
   p. p. Rehabilitated (-t?`t?d); p. pr. & vb. n.
   Rehabilitating.] [Pref. re- re- + habilitate: cf. LL.
   rehabilitare, F. r['e]habiliter.]
   To invest or clothe again with some right, authority, or
   dignity; to restore to a former capacity; to reinstate; to
   qualify again; to restore, as a delinquent, to a former
   right, rank, or privilege lost or forfeited; -- a term of
   civil and canon law.
   [1913 Webster]

         Restoring and rehabilitating the party.  --Burke.
   [1913 Webster]

WordNet (r) 3.0 (2006):

rehabilitate
    v 1: help to readapt, as to a former state of health or good
         repute; "The prisoner was successfully rehabilitated";
         "After a year in the mental clinic, the patient is now
         rehabilitated"
    2: reinstall politically; "Deng Xiao Ping was rehabilitated
       several times throughout his lifetime" [ant: purge]
    3: restore to a state of good condition or operation