A victory for the terrorists?
Regarding the question of whether the fall of Aznar's government in Spain is an indication that the terrorists are winning: hell no.
I'm with Guy Andrew Hall: if Aznar's policies had been successful at reducing the threat from terrorism then his party would have stayed in power. But the Madrid attacks show that his policies have failed. A new government with new policies might have a better chance at success. And, if they succeed, then the terrorist attacks have failed.
Also, the idea that these attacks alone brought down Aznar's party is absurd. If there wasn't an underlying resentment of Aznar's party to begin with then the attacks would have bolstered his support (the rally-round-the-flag effect). The fact that his party collapsed in the face of the attacks demonstrates that he had lost the confidence of the Spanish people long before 11-M.
This should give hope to at least one branch of conspiracy-mongers: an "October surprise" in the form of a serious terrorist attack might actually hurt Bush's chances of re-election. The same underlying sense of resentment that existed in Spain is seeping through the body politic in America. It could take just one significant event to cause people to run from Bush in a stampede.
Let's hope it doesn't come to that.