It may be true or it may not be true - but the fact that Bush and company, and a bunch of other leading politicians has said so doesn't make it any more likely to be true. (Note, I said "leading" - there are decent and honest politicians, but they generally aren't "leading", or so it seems. In any party, in any country.)

Just by instinct I would imagine that Saddam is a lot more popular in Iraq now than he was a few month back. For the same reason that Bush appears to be more popular than he was before September 11th. When your country seems to be under attack, there's a tendency to rally round the leader. Even when it's a pretty unpleasant leader. Americans and Iraqis aren't so very different.