Check out this article
by UPI's Eli Lake on the growing split between the US and the US-appointed Iraqi Governing Council (IGC), particularly as that rift came out into the open in New York this week.
This question has so many moving parts -- who should have authority over the ministries, who doles out the contracts, whether the IGC really has that much more legitimacy than Bremer -- that it's awfully hard to make heads or tails of. But I'm quite skeptical that a quick move to devolve control to this IGC would be a good idea.
On this issue, if on few others, I think the administration is right.