What he meant was that the Gulf War would be a catalyst, or give birth to, much costlier future battles for the United States. It's generally misinterpreted to suggest that the 1991 conflict would be some sort of grand defeat of the American forces (though he did use such rhetoric at the time, as well). That's not what this statement means.
Considering Saddam's involvement in the September 11th attacks, the inevitable invasion of Iraq (clearly a response to the attacks), his arsenal of chemical weapons and his desire to use them against our forces and the Israeli civilian population, it's safe to assume some nasty future battles do lie ahead. I'm no military expert, but I'm guessing those scenarios (and others unkown to us) are precisely what we're spending these months planning and preparing for. I'm also guessing that Saddam's involvement in the 9/11 atrocities has been downplayed and called into question for the sole purpose of buying the administration time to prepare such contingencies.
Should a World War break out as a result of renewed fighting in the Iraq, history will accurately show its origins lie in the 1991 Gulf War. And Saddam's "mother of all battles" declaration will prove to be correct.