  Motivated to understand the nature of the strongly insulating $\nu=0$ quantum
Hall state in bilayer graphene, we develop the theory of the state in the
framework of quantum Hall ferromagnetism. The generic phase diagram, obtained
in the presence of the isospin anisotropy, perpendicular electric field, and
Zeeman effect, consists of the spin-polarized ferromagnetic (F), canted
antiferromagnetic (CAF), and partially (PLP) and fully (FLP) layer-polarized
phases. We address the edge transport properties of the phases. Comparing our
findings with the recent data on suspended dual-gated devices, we conclude that
the insulating $\nu=0$ state realized in bilayer graphene at lower electric
field is the CAF phase. We also predict a continuous and a sharp
insulator-metal phase transition upon tilting the magnetic field from the
insulating CAF and FLP phases, respectively, to the F phase with metallic edge
conductance $2e^2/h$, which could be within the reach of available fields and
could allow one to identify and distinguish the phases experimentally.
