First of all, I amy not live in Virginia but I do know how campaigns work. In any campaign, especially in Republican states, taxes are a litmus test. You can't just be tolerable, you have to be very good.
Then you forget that it was the Republicans in the State House who allowed the tax increases to come in, where it to be used as a campaign issues against Warner it would back fire... trust me, these are not astronomical rises, these are well thought out modests increases that have produced visible results and are viewed as such.
Finally, might I point out that George Allen left office as Governor with higher approval ratings than Warner has now and he barely beat Chuck Robb for Senate in 2000. High approval ratings don't always translate into votes in Virginia.
Allen’s popularity is one reason why I think Warner will wait till 2008 , when John Warner may well retire and he would win any open contest. Against Allen it would be tough but he could win, you forget all the factors that where important in 2000 Allen was taking on an incumbent yet at the same time it was a presidential year and Bush was at the top of the ticket I think it’s more a reflection on Allen as a candidate and the campaign he ran that he didn’t win more convincingly in such a republican state.
If he ran in 2008 Warner would have the advantage of being a popular former governor and running in an open race and in the end this would trump it being a presidential year. If he ran in 2006 it would not be a presidential year however nor would it be an open race and Allen is a popular (if not wildly so) incumbent so it would be tough, but it is absurd to suggest that any contest between Allen and Warner would not be close and its similarly flawed to argue that if he was eligible he would lose re-election he wouldn’t and at the same time in any open race in 2008 he would be the favourite. But at the same time I don't think he'll run for president (though a "Draft Warner" movment is possible) he'll look to run for the Senate either in 2006 or 2008.