Basically, the problem with the GAO report (according to the administration) is:

1) The 18 benchmarks were graded pass/fail; they either had been met, or they had not been met.
2) Due to the above, there was no way to grade or scale things that were in the process of "improving."
3) Because of the above, it painted a bleaker picture of the situation in Iraq than what the administration thinks (or wants to think, or wants us to think, depending on how you look at it) is actually occuring.

That said, the GAO report is supposed to be independent, so the report does have some merit. And I've yet to hear some viable truths from anyone in this administration that weren't obviously truths from the get-go.

Of course, this won't matter to the Bush adherents. The Freepers and the rest of their ilk will talk about conspiracies, and how much the GAO hates Amurika and want our troops to die, or some such.

So overall, the GAO report is, in the long run, completely irrelevent. The war will keep going until it peters out (like Vietnam), we will reach some kind of stale-mate or ceasefire (like Korea), and we will have lost time, people, equipment, money, and international goodwill and capital for no gain (like both Korea and Vietnam).

The fact of the matter is we got hoodwinked. Lied to. Manipulated. We had our emotions played with by fear, nationalism, arrogance. Ah, the irony would be hilarious, if only it were some other country...