Calpundit points out a column by Dick Meyer, who is the editorial director of CBSNews.com.
From the beginning, there has been a credibility problem with the Bush Administration. Fair or not, the 2000 election tainted Bush's presidency for a lot of people. This is why were are seeing Kerry polling even with Bush (although the numbers are fluctuating, they still make a point). Many people will see the "Muhhamed Horton" ad and just laugh.
As long as John Kerry comes out strong in his own defence, Bush's credibility problem might just be his downfall.