A conservative third party candidate will probably do at least as well in 2008 if a RINO wins the nomination for the Presidency. In the 1960s, public outcry against rapidly increasing street crime, the hippie movement, and a protracted no-win war led to George Wallace winning 13% of the national Presidential vote in 1968 and carrying several states. Many of his votes were disaffected white Southerners and white Catholics whose families had been Democrats for decades, if not generations. This seismic shift in sentiment led to Nixon's 49 state sweep in 1972 and Reagan's election in 1980, the latter in part from those Reagan Democrats who had been Wallace supporters. The issues of illegal immigration (both parties are soft on illegals now as they were soft on crime then), cultural degeneracy (the former hippies are now 50 and 60-something college deans and entertainment kingpins), and a protracted no win war, this time in Southwest, not Southeast, Asia, may lead to a similar political landscape in 2008 as in 1968.
I think that it's actually more likely that this split would occur on the left, if no anti-war candidate appears. Hillary simply isn't credibly anti-war, although Obama is. If Hillary gets the nomination, there is simply too much untapped anti-war sentiment in the country now to leave that vacuum unfilled.
Could it happen on the right, too? I could see it, in the event that three things happen. A too-liberal candidate is fielded, without a good conservative counterweight VP, and insufficient assurances are given to 2nd Amendment supporters. Social conservatives may be upset over gay rights and abortion, but they're not going anywhere over that. They may over guns.
Here's where I see the difference. The RNC can take stopgap measures to defeat a mutiny. They have options, and I'm sure the number crunchers looking at Rudy won't make the obvious, suicidal mistakes I mentioned above. Rudy can disarm every real threat to his victory by picking a conservative VP, and making a public pledge on the 2nd Amendment.
The DNC does not have such options. There is no way to spin being anti-war. There is simply no wiggle room, and a balanced ticket won't cut it. I'm sure their number crunchers are very sad men, because there is no easy answer to sell their clients on and promise them victory. Sometimes there is no path between Scylla and Charybdis, and it would seem that now is such a time.
Your conjecture falls apart when you put Hillary into the equation. SHE will not be close in any Southern states and will lose many, if not most, Northern ones.
There is little doubt that Giuliani will win the Presidency by a large margin so the <2%ers will be irrelevant yet again.
Rudyphobes are not afraid that he will lose to Hillary. They know he would win easily. Their fear is that by doing so their power to hold the GOP hostage will be OVER.