Ddrak- I mispoke when I said China had gone from Monopolistic-Communist to Capitalist Democracy. I meant to say Monopolistic-Communist to Capitalist-Communist (or probably more like Capitalist-Oligarchy). It was late and I was tired, that's my only excuse. The fear is on the part of the Chinese Oligarchy is simply that they will be pressed by thier own people into going to Russian route.
As for your contention that yearning for cash and personal wealth is not the same as yearning for freedom has I believe put the cart before the horse. Yearning for cash and personal wealth is of no real importance if you cannot spend it (or if you are drastically limited in what you can buy with it). Yearnings for wealth are an effect of a yearning for personal freedom (a by-product if you will). You want wealth not for the sake of having wealth, you want wealth because of what you can do with it. But, I'm not conflating the two ideas, I know them to be seperate. But the wish for wealth is a by-product of the wish for freedom, not the other way around- without freedom to use it, money is worthless.
As for the Russians, I think it is a drastic mischaricterization to say that they have gone totalitarian again. They have certainly put in more controls, but they are FAR from resorting to anything that resembles non-democratic. You are right to point out that person freedoms are always restricted in times of crisis. There are many instances in history which bear this out (e.g., England/France during Napoleon, US/Europe during WW1/WW2, etc). Yet these countries remained democratic, and afterwards expanded in thier use of democracy. Your argument simply doesn't bear out historically.
As to Iraq generally, a breakup of Iraq would actually benefit the US so far as oil is concerned. Keep in mind that Saudi Arabia is Shia and has historically had strong religious influence over them (the Saudi royal family appoints all the relgious people in the Shia religion). So why is the US trying to keep them together? That actually has more to do with the stabalization of the region than anything else. And, it goes back to my comments earlier as to motiviations on the Iraqis themselves to stay together. In the event of a breakup of Iraq, Iran will move into Shi'ite controlled areas, Turkey will invade Kurdish areas, and Saudi Arabia will no doubt move into Sunni areas. And since there are no natural boundaries and the people in Iraq do not live exclusively in one of these three areas, the result would not doubt be very similar to the confilcts that errupted in the Balkans over the last few hundred years.
I think you are wrong in how you are defining what is in the best interest of the US, in what our current role actually is, and in how you are depicting the forces at work inside Iraq. And though, I'm not very hopeful that this post will extricate you from that misevaluation, I hope it will at least give you something to think about.