I'm predicting that by the fall of 2004 it will be an "anybody but Bush" race, and whatever Democrat is running will win.
Voters will be asking themselves, as usual at election time, "Am I better off?" and "Do I feel more secure?" I think they will answer no on both counts. The economy will continue to limp, if not worse, and the Republicans will be held accountable. Iraq will continue to be a running sore, and terrorism will either feel more threatening than ever or hardly a threat at all; either way Bush looks bad. Iraq and other military misadventures will have turned even the military against the Bush administration.
Also I think public taste will turn against the bombast and constant-attack mode of the right wing, whose stridency has increased rather than slacked off when their party took power. When an Ann Coulter starts trying to revive McCarthyism, a certain American gag reflex cuts in.
By late 2004 I would predict rumblings among some Republicans about dumping yet another one-term Bush, but they're stuck with him as their candidate. Many expected supporters will just not show up.
If I had to predict a successful Democratic candidate in August 2003 I would say Howard Dean, because of his conspicuous fiscal responsibility (not the main attraction in 2003 but it might be in 2004). But other candidates may turn up as Bush support dwindles---a Joe Biden, Wesley Clark, or even Hillary Clinton.
It will be interesting to see how votes about this Prediction move as the two years goes by.
I would love to lose this bet, but I feel that the Bush apparatus is so deeply entrenched - by virtue of big money, media laziness and prejudice and by the manipulation of voting processes - that it will prove unstoppable.
I see this administration being able to create emergencies whenever it feels like it...and able to count on TV journos to faithfully whip up the right level of panic so that everyone will basically vote for the party of the military.
I also see the democrats quite powerless against the level of jingoistic paranoia that the Right can now whip up. Any democrat who dares to say, for example, 'Hold on - perhaps we don't need to be spending a million bucks a minute on defence' is dead in the water. So any democrat is forced to essentially espouse the Right's agenda - which the Right do much better.
I also would make a - cash-free - side-bet that either Osama bin Laden and Saddam Hussein (or both) will be 'found' in the few weeks before the election, to great orgies of self-congratulatory bottom-kissing.
The predictor wins if a Democrat is elected to the US Presidency in November 2004 and a Democrat (could be former Vice President) is in office as President in August 2005. Otherwise the challenger wins.