Iraq appears to have disappeared off the radar for the moment with the Sarah Palin story dominating the news cycle. However, the situation there reminds me of that of Yugoslavia in the last days of president Tito.
There was a country basically at peace since the Second World War but in essence a simmering cauldron of ethnic tension held down by the military power of the Tito government. On Tito's death, the nationalistic Slobodan Milosovic rose to power and the lid came off. How similar is Iraq, with the US military providing the 'lid' in this case, but the underlying ethnic, or in this case, religious tensions still existing?
Yes, the 'Surge' was part of the success in reducing the level of violence in Iraq. Just as important though, I believe, were the decision by the Sunni tribes to join the fight against Al Qaeda - The Awakening, and the decision by Muqtada al-Sadr's Mahdi Army to observe a ceasefire and the ethnic cleansing and subsequent walling off of various Baghdad districts.
Nouri al-Maliki, the Iraqi prime minister, doesn't seem inclined to integrate the Sunni leaders into the country's government. Indeed, the opposite appears to be happening and he is making a grab for power and excluding them. The status of oil-rich Kirkuk is also a potential flashpoint between the Iraqi government and the Kurds, who to all intents and purposes are self-governing.
All in all then, the underlying tensions in Iraq are still there and until there are moves by the Iraqi government to include the Sunnis and Kurds in power, the Yugoslavia scenario is still a possible outcome.