McCain can run on experience against Edwards and Obama. I don't think it'd be enough to win the day, because I lean towards the belief that he's ultimately doomed by the war.
Your Nixon comparison is one I've thought of. McCain would look old and tired next to either E or O, and it likely becomes a Kennedy-Nixon thing, but I'm just hesitant to count him out because of the cult built around him by the media.
Certainly against Clinton, I'd worry it would completely ruin us. WHEEEEEEEEEEEEEEEEEEEEE!
I think I'd still bet on Hillary, but I'd worry. WHEEEEEEEEEEEEEEEEEEEEE!