If a State Legislative candidate needed to run on the issue of Iraq in 2006 to win, then that's a significant liability moving forward—a clue that they're just not strong enough candidates to win on their own with a set of real issues; that they don't have a strong enough connection with their district to represent it effectively once they get to the state capitol and have to face issues other than Iraq.
It all comes back to a very pointed statement made by a Republican strategist in 1986 following the loss of a lot of Reagan landslide Senate seats (and I paraphrase)—had we known that we had a chance of winning (in 1980), we'd have run better candidates.
Basically, the lot running for re-election in 1986 just wasn't strong enough to win re-election in a neutral (or worse) environment. We may see some giveback in 2008 and 2010 of state legislative seats just based on the simple sink/swim notion that a certain number of Democrats who won last year simply do not have the credentials or capabilities of serving effectively.
Most of the 1980 Republican Senate incumbents that lost in 1986 lost because 1986 was a bad year for Republicans and most of them barely lost.