The way I see it:
1. Lott was receiving pressure from the party to step down, probably because he would be a liability to the party. While this is true, it speaks highly of Lott that he accepted his responsibility for the words and did what he needed to do. It took him two weeks... so? He tried the apology route, it didn't work, so he must make amends in the only way possible- step down from leadership. Sorry, I'm finding it difficult to find fault with this in any way.
2. The radical faction of the Democratic party is making hay out of this, and it is indeed becoming a central plank for 2004. To ignore this fact is foolish for the Republican party.
3. The Democratic party and supporters have there own Trent Lotts, but they can never be called on it. It's a double standard, and everyone knows it. Sure, they are good at rationalizing away why their crap doesn't stink, but they never seem to make that step that shows they accept responsibility for their actions. They DO make sad faces and bite their lips, but they hang on. And the public loves them for it.
4. It doesn't matter. Lott did something stupid that caused an uproar. His actions were extremely impolitic, and he endangered the future of the Republican initiatives for the next several years. That is unforgiveable, just as such an error in corporate America would result in demotion or termination. The party IS holding Lott accountable, and it should. Spin it any way you like, but the Reps are getting tarred for doing the right thing.
Me, I do my job even if the people around me won't. I don't spend my time worrying about what they do or don't do, nor do I listen one second to what they have to say about my work when I know they don't live up to the same standards they criticize me about. In the same way, the Dems should be very quiet right now. Either that, or their versions of Trent Lott should start making public apologies and stepping back from positions of power. I won't hold my breath, though.