SCD Type 2 Dimension -> Is this the correct layout for a type 2 scd with this type of data present?
Making SSAS hierarchies on slowly changing dimensions is a bit of a fiddle.  You need to make surrogate keys for each historical version at each level of the hierarchy.  Then the key has the actual business facing name, which the user selects or reports by.

As an example, imagine worker BloggsJ in Division1, which is in LineOfBusiness1.  Now Division1 gets moved to LineOfBusiness2.  Logically you have the Division entity with two rows now:

DivisionKey     Division     LineOfBusinessKey
          1     Division1                   11 
          2     Division2                   12
          3     Division1                   12


and

LineOfBusinessKey    LineOfBusiness
               11    LineOfBusiness1
               12    LineOfBusiness2


Now, we have worker BloggsJ, who is assigned to Division 1, which is subsequently moved

WorkerKey  WorkerName   DivisionKey   Division   LineOfBusinessKey   LineOfBusiness
      101     BloggsJ             1   Division1                 11  LineOfBusiness1
      102     BloggsJ             3   Division1                 12  LineOfBusiness2
      103     SmithF              2   Division2                 12  LineOfBusiness2


In this case the keys remain in a strictly hierachical order:


LineOfBusiness2 (Key=12) has two children: Division2 (Key=2) and Division1 (Key=3).  Division1 (Key=3) has one child: BloggsJ (Key=102) and Division2 (Key=2) has one child: SmithF (Key=103).
LineOfBusiness1 (Key=11) has one child: Division1 (Key=1), which has one Child: BloggsJ (Key=101)


Displaying the name in the cube allows you to build a hierarchy that can support drill-down operations.  You will also probably want to hide the base attributes for this hierarchy and display another set with just the names, so there is something in the dimension that will produce a clean, unique list of members at each level without opaque, confusing repeated names.

*****Update 05012012 3:22 PM CST

Here is an image of my data example.