Everyone else will wait to see what happens in November, but I think the Republicans will gain big ground because the economy is perking up, Bush is doing well on the war, and polls indicated at the start of the war that people were glad that it was Bush and not Gore in the White House.
In 2004, after two years of a Republican in the White House with control of both houses of Congress, the Democrats will be dying to run an also-ran, because nobody else will want to be labeled as a "failed candidate" for the 2008 election.
-PJ