Well, we pretty much proved in Iraq that off-the-shelf military establishments are no match for the real thing , where new equipment is integrated with doctrine, C3I and logistical support. The Chinese are getting there (with occasional help from Loral, Hughes Aerospace, and William Jefferson Clinton, unindicted co-conspirator), but the third-world military establishments, despite Sandhurst training and oodles of French and ex-Sov armament (and in the case of Iran, British Shir Iran tanks and U.S. F-4's and F-14A's), are just expensive card-houses for the most part.
That said, I agree, if they ever get nuclear weapons they'll use them. They'll try to use them deniably, ambiguously, and leave no traces. They'll wage asymmetrical stealth war in which every U.S. intelligence failure costs us a city. That's what they'd like to do -- nuclear blackmail, made credible by humiliating nuclear atrocities.
The British Empire was doomed by newsreel footage of Japanese troops leading British military and naval personnel -- and women -- into captivity. International relations is like street cred. You're only as good as your last contest. We lost more than we know yet on 9/11, and the enemy are still gloating. Most Americans don't get it yet, and the ones who do are all closedmouthed about it, since they don't want to cop to the enemy's bragging rights.