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.
Here in Oregon, most of the Democrats who helped us take back the State House ran on local issues and against the repugnant Republican State House Speaker. I'm pretty sure we'll hold most the seats we won. To give you a flavor of the Democratic freshman class, we have a rancher, a community activist, the founder of one of the nation's fastest growing tech consultancy firms, a Rhode Scholar, and the list goes on. These folks aren't David Funderburks or any of the crappy Republicans senators like Mack Mattingly who won in 1980 and then lost in 1986.