This is actually a rather brilliant idea and could be played many ways, creating so many AUs.

I think the one I'd run with would stick to canon right up and until Tom asks Dumbledore for the job - I'd hae the board in charge of placement. Remember that at this time Tom was held very highly in magical society's eyes, he was a model student, all his teachers and classmates loved him and he had won an award for special services to Hogwarts. The Board would have no choice but to hire him.

Dumbledore, being Dumbledore, would never fully lose his initial distrust of Tom and would continually, if discretely, try and unseat Tom.

Tom on the other hand would again play the model professor with no bias whatsoever, great reviews from the students etc etc. He wouldn't specifically select Harry, but rather form a slightly less obvious version of the Slug Club - thereby bringing the brightest, most talented and best connected to his side. Harry would obviously fall into the first two if not all three categories.

I would envision that Tom would not openly strike, but perhaps assassinate a few people here and there to get his followers into key positions - in the ministry and otherwise. He would, eventually, discredit Dumbledore (realizing that if he didn't Dumbledore would discredit him) and make him a convict.

It is into this world that Harry would come. With Dumbledore the apparent Dark Lord and Tom the benevolent Headmaster. The story would then be about the struggle to gain Harry's allegiance as both of them realize that they will inevitably end up at war with each other.