There has been a lot of talk about outgoing VA Governor Mark Warner on the Democrat's side. He's a Democrat governor in a conservative southern state with success working with a Republican-controlled legislature and an approval rating around 70%.
Of course, there's also Hillary Clinton. First, though, she has to get re-elected to the Senate. If she loses or if she wins by a slim margin, forget 2008! Even so, I think there's still the question that she may or may not be too polarizing a figure and won't get the support of swing voters.
I'm not sure who in the GOP may be in the running. Rudy Guiliani, John McCain, VA Senator George Allen, and Condi Rice I think are at the top of many lists. With all the legal and ethical questions with the GOP in Congress these days, they would be better off with someone outside DC, but I don't know who that would or should be.