what is the impact of obsolete baseline in UCM?

when baselines are obsolete will it have any ill-effect?

For example if the baseline was already rebased by many, if i obsolete the baseline what will happen?

You can, but shouldn't obsolete a baseline which is currently used as a foundation baseline on an existing stream.
Even if it is possible, it used to have some side-effects like:

stopping other baselines from being seen by the "lsbl" command (swg1IC42113, fixed in ClearCase 7.0.x).
not showing the Baselines when foundation baseline is locked or obsolete (ss, fixed in ClearCase 7.0.x).

(older ClearCase like 2003 could have an issue if an ancestor of a baseline being rebased was obsolete: swg21214304. But that has been fixed long time ago)

It (ie, "obsoleting a foundation baseline") still has a current (May 2012, ClearCase 7.1.x) open bug:
swg1PM63804: PM63804: Lock obsolete a foundation baseline of a child stream results in all baselines on that stream not being displayed in the base.

Abstract: If a component baseline that happens to be also a foundation baseline of a stream is locked-obsolete, then the component tree browser with the 'Show obsolete baselines' tick-box unset, hides not only that baseline, but also and incorrectly all the baselines of the stream of which the just locked-obsoleted baseline is the foundation baseline.

WORKAROUND:

In the Component tree browser window there is no known workaround.

From command line, this was fixed with APAR IC42113, the 'cleartool lsbl -tree' command correctly hides the locked-obsolete foundation baseline, and correctly lists the non-locked-obsolete following baselines on that stream.

The other current bug is swg1IC39164:assertion failed for GUI rebase to latest baseline (ClearCase 7.1.x), and should be fix by upgrading to the latest patch.

Other than that, there are mostly advantages to obsolete old baseline, mainly because it will un-clutter the vast number of objects displayed when doing a browse baselines.