What does it mean? Democrats now control the House, the Senate hangs in the balance. it is the end of Bush's dominance, reaffirming his lame-duck status. He may try some dramatic ploys--even bombing Iran is not beyond the realm of possibility--but momentum has shifted to the Democrats. If they stick to bread-and-butter issues, and can get credit for ending the Iraq war without blowing up the world or the Middle East--they may position the party to win the White House in 2008.
How does Bush govern in this situation? He'll probably have to do what the Democrats want...