A resignation might not be just paper. What if he actually ceded the territory, and went underground? He would give up the advantage of having all the Iraqi infrastructure; on the other hand, that traditional infrastructure can't stand up to the U.S. anyway. In a sense, that infrastructure is his major weakness, since it is a target for our retaliation.
If he can maintain control of his WMD even after giving up the territory he now controls, he would maintain his major military advantage and at the same time get rid of his major vulnerability.
I do not know if he has the experience or skills to go underground successfully though. He hasn't lived the life of someone like bin Laden.
In any case, what would we do? Attacking Iraq would seem pointless if he did this. He would have converted from a nation-state with a terrorist component to a purely covert terrorist organization, the kind that's very hard to deal with.
In those far away lands, fanatics exist to commit terror, to precisely the extent that the national governments allow them, or are to weak to stop them. If a successor government in Iraq allowed Saddam to have any power or resources for teror, it would be an unacceptable government, from the standpoint of the US (and Britain).
One way or the other, and sooner or later, the US military might WILL stamp down terrorists. If it requires taking down a government (Afghanistan, Iraq) it will get done. If it is non-governmental terror operatives, the US will REQUIRE the host government to act, or will eventually do so, in spite of the government.
It won't all happen at once. Several nations need adjustment, such that they are less danger to their citizens, neighbors and to the US. The adjustments will be brought about by military, political and financial means.
It appears there was no "peace dividend" at the close of the cold war. Islamist terror is the enemy of civilized nations.
Without physical territory and oil revenue, even the 60% cash he obtains through that absurd 'food for oil' sham where he buys food and medicine but instead takes cash kickbacks and little food, Hussein is a nobody, not even capable of WMD.
He's not set up like Osama bin Laden with a group of religiously motivated loyalists who adore him. Remember, Osama was literally loved- he was soft spoken to his people, generous to them and to 'the poor', and his followers saw him as almost a prophet. He actually had a fan club- Saddam Hussein, on the other hand, only has a fan club among the European and American left and we know they are about worthless in a fight. Hussein only obtains loyalty from Iraqis with FEAR. People who rule by fear need the institutions of a state to secure the peon's loyalty and to prevent themselves from getting assassinated. Saddam's not worshipped. He's not seen as a prophet. He's detested. Without the support of religious fanatics, he must rely instead on a personal guard, guarded by yet another guard, spied on by spies who are in turn spied on by other informants, and so forth.
Hussein is still alive only because there is absolutely no trust in anyone and so, conspiracies are difficult to get rolling in a climate of fear like that. The reward for everyone's loyalty is to not be executed. And enough pay to keep anyone from becoming so desperate that they can overcome their fear, of course.
So let's say ol' Hussein just slinks off to the 'underground.' If he does so, he loses the institutions that he needs to spy on other institutions and keep them loyal. He loses his source of income, and cannot pay his agencies and protectors. Instead of spying on one another they would begin to conspire against Hussein, and the fewer resources hussein has, the more quickly this will happen. He'd be stabbed in the back inside of a day because no one loves him for himself or for his ideology- in that respect he's even more pathetic than bin Laden who had his merry band of devoted fanatics who would lay their lives down for him.
If he goes 'underground,' how will he take his scientists with him and prevent them from escape? How will he guard them and make sure they continue to work? How will he get people to manufacture the things he needs without a place, without income, and with a much reduced staff of spies and informants? He can't- he's not a religious figure, he's not inspiring, he is loyal to no one and nno one is loyal to him- if he can't pay and if he can't control, he's as good as dead.
Unlike Usama, all of Hussein's hopes and dreams are invested in his Babylonian fantasy, for he sees himself as a reincarnated King, and he needs servants, perks and physical structures as much as he needs more practical training camps and bases. He isn't going to give up Iraq, not to go underground and not even to preserve his own life. His empire is his heart and soul and without it he's seen for what he is - soulless and heartless. He will be assassinated without his infrastructure.
That's just my humble opinion, anyway. If the US was unified and everyone speaking with one voice, then Hussein might be willing to give it up and go to some remote Island or hang out in Morocco like a rich businessman. But the message Hussein is getting from the US is that we are still weak and disunified, thanks to the idiots in the Democrat Party who are busily begging Hussein to let them wash his feet. With such wormlike creatures groveling for him in front of his general assembly in Baghdad, Hussein feels powerful and predatory because it reinforces his view that the US is in decline, it is contemptible and as foolish as its senators. Saddam's resolve will be the greater for it. If he was feeling fear and doubt before, he won't be afraid with the Democrats prostrating themselves before his throne and swearing fealty to him.