I think that we can now officially say that Israel lost every aspect of the 2006 war with Hezbollah, after today's "prisoner swap": http://news.yahoo.com/s/nm/20080716/wl_nm/israel_lebanon_swap_dc. That Israel exchanged living terrrorists (and the bodies of dead Palestinian terrorist "heroes") for two dead soldiers will do nothing other than convince Hezbollah, Hamas and their vile ilk that kidnapping Israelis works. The proof is in the pudding. Not surprisingly, the returned terrorists were greeted like rock stars upon their return, with the adulation coming not just from Hezbollah but from Lebanese government officials as well.
This is as dark a day in Israeli history as I have ever personally seen.
UPDATE (4:48 p.m.): For the joyous Palestinian reaction, go here: http://www.ynetnews.com/articles/0,7340,L-3568977,00.html. Note the quote in the article from the Palestinian terrrorist who talks about the precedent set by this deal.