There is one issue and one issue only in the presidential race and that is the war on terror, including the war in Iraq. And this is the reason that John Kerry seems to be slipping in the polls. Most importanly, he has failed to stake himself out as a viable alternative to Bush on this issue. His sole strategy has been to state that he served in Vietnam and he would serve again. As the saying goes, when your only tool is hammer, treat every problem as if it is a nail. When asked about just about any issue, from Iraq to the environment, the general response from Democrats is, "John Kerry served in Vietnam."
And that's why the Swift Boat Veterans for the Truth have done such damage to him. By raising questions about his service (and let me add that I think there isn't the slightest truth to what the SBVT'ers are alleging), they are helping to saw off the one and only leg that Kerry stands on.
In fact, one might be able to spin out a more general theory about campaigns against vulnerable presidential incumbents. Since World War II, six elections fit into this category: 1948 (Dewey v. Truman); 1976 (Carter v. Ford); 1980 (Reagan v. Carter); 1992 (Clinton v. Bush I); and 1996 (Dole v. Clinton). In each race, the incumbent began the year in a very vulnerable position, with low approval ratings and running with or behind his most likely challengers. In 1948 and 1996, the incumbents (Truman and Clinton) ended up winning, in large part due the lackluster campaigns of their opponents. In 1948, Dewey offered a textbook case of how to run a bland, uncontroversial, and losing campaign. One newspaper claimed that Dewey's speeches boiled down to "Agriculture is important. Our rivers are full of fish. You cannot have freedom without liberty. Our future lies ahead." In 1996, Dole didn't do much better. Like Kerry, he touted his military service and personal sacrifice almost to the exclusion of everything else. His biggest move was to resign his Senate seat in order to focus on the presidential race, in a sense arguing that he was willing to make sacrifices, just as he did in World War II, for the good of the country. Very little was ever said about the substance of how he would serve as president.
This contrasts with the elections in which challengers knocked off incumbents. In 1992, Bill Clinton offered a very specific set of alternatives to George H.W. Bush--middle class tax cuts, welfare reform, a balanced budget, more police on the streets, and national healthcare. The same with Reagan in 1980--budget and tax cuts, deregulations and the abolition of federal departments, increased military spending, and opposition to SALT II.
The one outlier to this pattern is in 1976, when Jimmy Carter ran a rather content-free, Dewey-esque campaign, emphasizing to voters that his intelligence and personal morals meant that they could trust him. This worked, but just barely and then only against an unelected incumbent with the poorest economy in 40 years and in the aftermath of the worst scandal in presidential history.
I should probably add that content-free campaigns seem much more effective against incumbent vice-presidents seem to work better. In 1960, Kennedy defeated Nixon without offering much more than vague promises to "get the country moving again." In 1968, Nixon's "secret plan" to end the Vietnam War did the trick against Hubert Humphrey. And in 2000, George W. Bush's promise to "uphold the honor and dignity" of the presidency worked against Al Gore. Only Michael Dukakis's focus on "competence, not ideology" failed to defeat and incumbent vice-president.
I guess all of this is a long way of saying that elections against incumbent presidents aren't just an up or down referendum on the incumbent. Rather, even with vulnerable incumbents, ideas matter and you can't beat something with nothing.