It's obviously too early for firmly confident comments about the Chalabi affair. But here's a start:
If the worst allegations are true, this is a scandal that could bring down the Bush administration. (I say this as someone who was predicting reelection until just two days ago.) And even if they aren't true, it's clear that the divisions within Washington's military and intelligence community are now gaping chasms—the sort of splits that could paralyze U.S. foreign policy.
A cynic might call that an improvement.