Given the wrangling over the Iraqi Constitution and the putative future of that country hanging in the balance, here's my attempt at prophesy.
It's an imbroglio for sure. Reality is hitting the neocons square in the face. Populations of people are different, cultural memes are different, environments are different, and on. The Millesque policy of changing the world likely cannot work, least of all in the Middle East.
First off, Iraqis have an average estimated IQ of around 87 and a PPP of $2,100 (2004 est). There is no other functioning democracy with such depressing demographic stats.
Consanguineous marriage is an enormous problem. About half of Iraq men are married to their second cousin or closer. Many unions are between first cousins (25% genetic proximity) and some even between uncle and niece (50% genetic proximity). Developmental and cognitive problems aside, this fosters an atmosphere of nepotism that is antithetical to liberal democracy and a free market system. By keeping the extended family tightly knit, economic wealth and power stays within the family itself.
There is of course the macro factionalism as well (in addition to the clan-like infighting). The Shias are biding their time now, letting the US clash with Sunni extremists. When the US withdrawals, however, it is conceivable that the Shia will crack down hard on Sunnis and unite with Iran (which is Shia-dominated). Then again, the Shias may truly be pussies who let themselves be rapaciously dominated by Saddam's minority Baathists for two decades and will do nothing to stop history from repeating itself. The Kurds want their own state and will feel uncomfortable with either Sunni or Shia domination. If the US pulls out, the Kurds may try to unite with their brethren in southeastern Turkey. In any case, I don't think they'll have much loyalty to Iraq as such.
Then there's Islam, the veritable religion of peace. The clashes here with a representative liberal democracy are going to be impossible to overcome. A secular state is the only way to circumvent the problem, and as we've seen that will not come without heavy coercion.
It seems to me we'll either have a far-right theocratic regime that is thoroughly anti-western and especially antisemitic (likely), an outright civil war (possible), a relatively peaceful cutting up of Iraq into a Kurdistan north, Sunni triangle-area state, and an Iraq-Iran Shia state (better than a civil war), or a slow process of secularization aided by Western stabilizers (unlikely the US public will stand for it). If the Kurds form a Kurdistan, the US will likely have to help insure they have open oil routes to the Persian Gulf.
Turkey is the best the Islamic world has to offer, and it has been interrupted several times by military coups while bouncing back and forth between a mildly secular democracy and Islamic fundamentalism. It has other problems: the KGK, debt almost equal to annual GDP, and 10% unemployment, but comparably it is a success as you point out Jared. Keep in mind also that Turks are the descendants of the Ottomans--they didn't dominate the region for hundreds of years because they were morons. They are more closely related to south Europeans than the the arabic middle east, and have greater cognitive ability. If Iraq became like Turkey, it would be a tremendous success, but don't count on it.
All that being said, Bush has a proven track record of pulling off victories when by all logical calculation he should fall on his face. Maybe the deity will give him a hand and make everything work out. We can certainly hope.