[Beethoven]

I think you're completely right about your diagnosis of Old Europe--except that the right political consequence would be to hold their feet to the fire, and make them pay. You can only do that if you have any kind of authority.
That's the funny thing about diplomacy--you have to deal with people you don't really like, and you have to take the long view. None of that is Bush's strength. But weaving strong treaties is the only practical way to keep the terrorists at bay (e.g. being allowed to hunt them down by special ops in other countries), control nuclear material etc.
Never mind the UN. It's best treated as a place where diplomats meet. It shouldn't have sovereign power. That, too, is something that needs to be installed carefully.