It is important to note that Bush never mentioned Obama by name.
Wasting no time, Obama's campaign issued a statement calling this a "false political attack".
It will be very interesting to see how John McCain responds to this ...
Update: Jim Geraghty has the full Bush quote. You decide if this is as controversial as the media is making it out to be:
"Some seem to believe we should negotiate with terrorists and radicals, as if some ingenious argument will persuade them they have been wrong all along. We have heard this foolish delusion before. As Nazi tanks crossed into Poland in 1939, an American senator declared: 'Lord, if only I could have talked to Hitler, all of this might have been avoided.' We have an obligation to call this what it is - the false comfort of appeasement, which has been repeatedly discredited by history."