For God's Sakes Chuck, Please Get In The Race
I think the most likely option now is that he will run again for another term in the Senate, or opt for the retirement line. In either case, its likely he might be fingered for a future cabinet position in 2008 in my opinion.
The Monday announcement is a bit strange because it will fall a few days after Fred's announcement, and the week of the Petraeus hearings. On Tuesday, Chuck and the rest of the Senate Foreign Relations committee are scheduled to hear Petraeus too.
EDIT: Hagel will announce his retirement on Monday. I still think this sets him up for a cabinet position (in a democratic administration) as Secretary of State or Defense. If so, it would probably be a good thing as he would be more effective in that role.