Oh you can be guaranteed that the run in '08 will get nasty. It's just gotten worse and worse over the few short years I've actually been observing them, and that's from both sides. I think it's quite a shame that political runs have to resort from "vote for me because" to "don't vote for him/her because." What are ya gonna do though? This country's populace just eats up the nastiness, so it isn't likely to end anytime soon.
As for my location slanting my opinion, if that were true, I can assure you it would be slanted in the other direction! Arkansas is kind of a funny place. We're the last Democrat stronghold in the south, but our Democrats are really just closeted Republicans. Most are more conservative than many Republicans. I live right on the border between Democrat and Republican in this state - basically the border between NW Arkansas (Wal-Mart, Tyson country, Republican) and the rest of Arkansas (small business, rural, largely poor, Democrat). It's interesting to watch how completely different an election will go between my county - Democrat - and the county directly north of me - Republican. But, the point is, even the Democrats in this state are mostly conservative, and I can assure you I'm quite the opposite of that. Bill Clinton was a very moderate Democrat himself, despite what you'll hear from certain national crazy talking heads (cougCoultercough). Hillary will not be a rabid liberal, because though she may be more liberal than her husband, she's still very much a moderate according to the spectrum.
I am very curious to see how this coming election will play itself out. If the Dems give the nod to Hillary, I can't fathom the Repubs giving it to a white conservative Christian man. That would probably be suicide after these last 8 years. So who would it be? McCain? Giuliani? Condi? Powell? I think they're going to have to work back toward the middle if they want any shot at winning....unless of course they want to just buy it again

I personally wouldn't be too upset with a Giuliani or McCain administration, as at least those guys are willing to stand up for what they believe in and not just bow to their parties.
But yes, you can be most assured that for whoever gets it, reputations are going to be trashed and smeared like no other election before it.