Russia is going to take over Georgia, or at least control the pipeline. It is crucial to their plans for the future of Russia. It is the lever they must have to get hold of 46 billion barrels of oil in the Central Asian nations. Russia needs the money. They are going to get it. Depend on it. They are long range planners, they are consistent, and as Christopher Andrew pointed out in the Mitrokhin archive, the KGB was much better at covert ops than we were. They are outfoxing us now and they are going to continue to do so.
The USA and Europe are unlikely to be able to do a damn thing about Georgia in the long run. Georgia is in Russia's backyard. To hold Georgia, the USA and Europe will need to provide an outsize investment in troops and aid. Doing so will simply result in proxies such as the PKK being used to tear things up. This will bleed the West with little or no benefit to us at almost no cost to Russia.
The Kremlin learned all about bleeding a nation to death when we did it to them in Afghanistan. I was in Sheremetevo when we invaded Afghanistan, and listened to a group of Russian army brass laughing and toasting to the eventual American loss in Afghanistan. The US economy is learning the cost of war against nations (Iraq and Afghanistan) full of factions and intrigue.
I helped a bit getting Mikheil Saakishvili into that office of the president that he occupies and in my judgment he is a grade A, 24 carat jackass. In January, over 100,000 people, in a country of less than 4 million people turned out to ask him to resign. Saakishvili is running roughshod over his people by playing the "I'm America's stooge" card left and right.
The USA is not going to be able to dictate to Russia what to do anymore. It was incredibly stupid of the Secretary of State to do that during the Bush administration when Russia was weaker, and Russia is in the process of making sure we learn that it is never going to happen again. The era of America as the only 800 lb gorilla in the jungle is over. Deal with it. Russia's interests are very simple, and they have merit.
When the USA went into Iraq, we kicked them out of their backyard and dictated to them that they had to give up billions they had invested there in Iraq's oil infrastructure. We also rejected a plan they floated to put an alternative pipeline from Central Asia across Russia, and built our own pipeline that short-circuited Russia. Russia wants and should have a piece of that pie. Folks, we have treated Russia very badly, and Russia's current action is not disproportionate in those terms, much as I dislike their heavy-handedness, and much as I sympathize with the people of the Caucasus.
If we sit down at the table with Russia, recognize what they want and need (believe me, Russia needs oil revenue a whole lot more than the USA does) we will have a good relationship. If we continue to play 800 lb rich kid taking the entire sandbox, kicking all the other kids out, then Russia is going to teach us some very harsh lessons.
The Russian basic strategy today is to make use of proxies to harry the USA, bleed us dry, and distract us with problems. It is also to make use of our media to use bigger stories as cover for actions they take directly. They did this in the previous invasion of South Ossetia under cover of the Beslan massacre. They may have tried to use the Olympics to do it again, but possibly Putin may have wanted a partial distraction - enough distraction that the USA wouldn't go into histrionics from a media feeding frenzy - but little enough distraction that the message has been delivered to other small nations that the USA is an unreliable ally.
If we look around, we see that suddenly North Korea is spinning up as a threat. Could that be the Kremlin? Probably. We will hear more of it I expect. I would also expect that if some other major distraction occurs, that Russia would use that as the time to roll forward in Georgia. What they have done with this most recent operation is to gain a few miles of ground (aside from demonstrating US foreign policy incompetence.) Russia is not going to give it back. They will hunker down and wait until the next opportune moment.
This is a very dangerous game for the USA right now. We need to pull back so that we can maintain strength in years to come. Right now we are playing it stupid. We are like a fat rich kid kicking all the other kids out of the sandbox for years, who can't see that the rough trade out there in the alleys has been figuring out how to take the fat boy down for a long time. It is time to deal, before the Russians have the power to ram their deals down our throat like we rammed ours down theirs. They will deal. I think the question is, will we? Hubris dies hard.