Over the weekend, the Russian Army cleared South Ossetia (and apparently Abkhazia) of Georgian troops. The air campaign that the Russian Air Force started on Friday continues, with reports of air strikes all over Georgia. The Russians have bombed the Baku-Tbilisi-Ceyhan pipeline, which carries Central Asian oil through Georgia to Turkey. There is no indication that the pipeline has been hit, and it would be easy to repair in any case. The Russian Navy is patrolling off Georgia, having delivered troops to Abkhazia and sunk a Georgian missile boat.
The spot to watch now is the Georgian city of Gori. The Georgian Army is dug in around Gori, which is 17 miles south of Tskhinvali, the capitol of South Ossetia. Gori has been subjected to an artillery bombardment, and reportedly to direct fire attacks by Russian tanks. How the Russians proceed in Gori will provide an important clue as to their larger intentions in the war. Right now the Russians control all disputed territory, but destroying the Georgian Army in Gori would cripple Georgian capabilities for the foreseeable future.
I thin Russia will simply reabsorb Georgia.