Bush has threatened to veto. He's probably not bluffing. The question is, how strong of a conference bill can we pass? I'm guessing that the House version will have to be watered down and/or porked up more, but still can probably be too strong for the President to sign.
The Republicans in Congress aren't breaking yet, so there's a limit to how much we can ram down the administrations throat. I'm also not sure if we can pull the equivalent of a continuing resolution. That's probably not worth it over a supplement battle.
Instead, the second bill will probably still have some tough provisions that Bush thinks he can sign and then safely ignore. Not sure what that will be, a lot will depend on the negotiators we use. This is a multi-round fight but I think we're setting up a stronger position for the next round.
Main downside, no provisions on Iran. For those of you that haven't seen it, they've captured 15 British sailors. It sounds like the Brits are going to be able to resolve that one, but this is the sort of incident that could escalate.