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I despise Bush, but what he said was nicely scripted and suitably vague - not "Israel gets to keep its settlements", but "the final agreement will need to take into account the realities of the last 40 years ."
True, that is the first time that a US president has even implied that the settlements might be acceptable (though an elected US president has still to make that distinction), but on the other hand, it does not rule out territory swapping, for instance, which, if done properly could bring some Palestinians back to the land they rushed to to keep the zionists from claiming it.
As to the right of return, it's not happening. Israel is already sitting on a demographic bomb with it's own Arabs and will be collectively damned if they will let back in people who panicked and fled (that's how they see it - driven out is how the Paelstinians see it. Doesn't matter who's right, but Israel is there now.) The Palestinians have a homeland: Jordan. They need a right of return to there.
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