Yes - he's done in 2008. Although the Russian (and Western) press floats stories from time-to-time surmising how he'll be able to find a loop hole in the term limits. As it stands now, I don't think he'll even try it - I think he's looking at making some $$$$$ after he's out of office.
Two years is a long time in politics, especially in Russian politics. Right now there is not a clear successor. Most are saying Sergej Ivanov is heir apparant, but his failure to properly modernize the Russian Army, control his subordinates, and get a handle of the hazing in the Russian military, are going to tie him down (I hope). Kasyanov (former PM) has announced he'll probably run, but he's got too many ties to oligarchs and that'll kill him with the "people." Dmitry Medvedev is the one to watch right now.
What ever happened to General Lebed? He seemed like an ok guy?