the worst possible case is that Iraq actually has these phantom WMD. And having them, after the states go in and push Saddam's back to the wall, Saddam launches them on Israel, the US troops in his country that are not near the oil wells. And he also gives weapons to terrorists for them to use against the US and its allies. Then the US would respond by launching a nuke in Bahgdad.
Edit: I forgot to include the fact that the terrorist attacks would not stop, thus there would be greater pressure on governments to do something, This would cause them to gradually get more power. The next thing you know, five years later, is that walking down the street, you will be asked by a police officer, "May i see your papers?" Warrants will no longer be needed to tap phone lines or conduct searches. Trials will be private, and cammeras will start to be placed in homes as you have nothing to hide if you aren't a terrorist. Thus our liberties are gone, and the terrorists have indeed won as our stature of living has gone down the Sh*tter with our consent, indirectly caused by them.
That my friends, is the worst case scenario.