I think Nader will do better when Dean tries to move to the middle after the primaries.
You're underestimating Bush's unpopularity in some quarters; the kind of people who would usually vote for a Green Party candidate (we're talking ultra-liberals, environmentalists, etc) absolutely despise him, and would vote for whoever they think is most likely to defeat Bush. I doubt they'll really care where the Dem. candidate stands, even assuming Dean suddenly moves to the middle. They just want Bush out of the White House.
I don't think the anti-Bush vote will win Dean the election, but I do believe it will nullify the threat posed by Nader.