Supposedly, McCain has said that if this hurts his presidential chances in '08, that's fine. I think he and his enormous ego will still run, but I'm not so sure he'll run as a Republican since he has hurt the GOP and is so disliked.
My guess is that he'll run as a "maverick independent" and get the media salivating over his candidacy. He'll be the Ross Perot of '08 and time will tell if he peels off enough votes to put Hillary in the White House, or if it backfires and helps the GOP candidate.
After the spanking Bush just gave McCain and his other three Senate buddies, I don't imagine his candidacy as an independent would hurt the GOP at all. :-)
IOWs it is still about McCain and politics just a different strategy. The man just doesn't have the charisma to become president but the media has fawned over him because he disagrees with the president and he thinks they love him, not that they just hate Bush.