John Dean has a nice piece arguing that Kerry should sue for defamation, that he can demonstrate the "actual malice" needed for a defamation suit brought by a public figure.
Not unlike the infamous Goldwater issue of Fact magazine, John O'Neill's co-authored Unfit For Command reeks of actual malice. Whether Senator Kerry is elected or not, he should take these false charges to court in order to end this kind of campaigning. In so doing, he would protect not only himself, his campaign, and his legacy - he would also set a valuable precedent for future candidates, and do a public service by warding off future baseless attacks.