I think this is the saving face moment for the bush administration, when they can get a new guy in there who has a fresh perspective instead of the neocon strongarm rumsfeldian vision of PNAC. This will allow them to change 'course' in Iraq by doing what they CLAIM to have been doing all along - listening to advisers. In reality, all the demands come from the top, cheney and bush run the show, cheney protects bush from the important decisions that he could be called to testify on, and bush lays out the demands based on what he 'feels' is the right choice after a conflict has been described in its most basic form.
The only remaining option for them in Iraq is to follow the Iraq study group findings, I think thats what they will do, and what they have been doing for months now - its been out for a while to them, but it just came out recently for the public to read.
Its questionable weather they will give way and have diplomatic relations with Iran, an Iraq study group recommendation, because of our strict loyalty to Israel, but perhaps they have no other choice and maybe they'll recognize this.