According to
CNN, al-Sadr has accepted an offer from the Iraqi National Conference to stand down his militia, surrender the shrine, and join the Conference.
The Allawi government, as can be seen in the article, is desperately spinning things. But, given Allawi's apparent rejection of a deal a few days back, this looks like a victory for Sadr. He's built a substantial following, stood up to the invaders, defended holy sites, been wounded by enemy fire, and stood up to the puppets in Baghdad.
However, questions still remain. The most obvious, as the article points out, is when Sadr's forces will withdraw. (I'd assume the answer is "as soon as the Americans let them") The second is whether Sadr will be allowed to take part in the Conference and subsequent political process, or how long he'll survive.
Still, the fact that the National Conference was powerful enough to ram this past both Allawi and the Americans is a positive sign. If they're listened to, that could do a lot for the stability of the country.
But given the rants coming out of Baghdad, that's a big if.