re: The issue is not democracy, but stability
Iran is Iraq's neighbour. They don't want chaos in Iraq, right at their border.
This is why there are talks.
True enough, the Shi-ites in Iraq will also benefit from these talks.
If it's humilating for Bush to talk to the Iranians, that's his problem. Bush wanted an old style war between countries, well, that also means negotiating like his father did in a position of strength against Saddam in 1991, but this time Bush Jr is not in such a position of strength.