The Russian rearmament: a disturbance in the Force, but for better or worse?

Folks have been stirring about Russian President Medvedev's announced plans to overhaul the Russian military:
The plan, first disclosed in October, envisions the most dramatic transformation of the Russian military since World War II, abandoning a structure designed to mobilize large numbers of new troops to fight a major war and replacing it with a leaner, standing army that can respond more quickly to local conflicts. Thousands of combat units staffed now only with officers would be eliminated, and the military's four-level command structure would be trimmed to a three-tier hierarchy.

My sense is that the Russians never seriously remade their military in the wake of the Soviet collapse -- which would mean that it is indeed high time for some major changes to be made. Last year's war with Georgia, despite the relative ease with which the Russian behemoth steamrolled it's diminutive southern neighbor, doubtless revealed serious inefficiencies in the Soviet command structure, as well as a need for more modern weaponry. The inimitable Johnson's Russia List points to Russia's perceived need for change:
“In fact, Medvedev did not say anything new,” commented Viktor Litovkin, the editor in chief of the Independent Military Review, a weekly supplement to the Moscow-based Nezavisimaya Gazeta daily. “He repeated for the umpteenth time that Russia’s armed forces need an upgrade. In fact, this upgrade is being done now, but its speed can be compared to that of a turtle. When Defense Minister Anatoly Serdyukov said that ten percent of the Russian army is equipped with modern weaponry, that meant that the remaining 90 percent were equipped with outdated weapons. Any president of any country would have to do something about it urgently, wouldn’t he?”

Indeed, as JRL goes on to note, Russia's economic contractions lately mean that money is tight for any purposes -- and that may well hold up any weaponry upgrades.

But the changes may not be entirely smooth. La Russophobe recently raised some alarms about the possibility of renewed hostilities with Georgia. One always has to be careful with the sometimes overly-strident LR, but this bit has me worried:
The ceasefire last August has left the strategically important Russian base in Armenia cut off with no overland military transit connections. The number of Russian soldiers in Armenia is limited to some 4000, but during 2006 and 2007 large amounts of heavy weapons and supplies were moved in under an agreement with Tbilisi from bases in Batumi and Akhalkalaki (Georgia)... [I]f a credible overland military transit link is not established within a year or two, there will be no possibility to either replace or modernize equipment.

I would suspect that, in order to put more pressure on Azerbaijan to route its oil through Russia, rather than through Georgia and Turkey, Russia would like to maintain links to its Armenia base. And as the Caspian Sea reserves dry up, control of transit routes will become increasingly important.

Moreover, Georgian determination to leave the CIS could be another spark in the tinder -- a trifecta of desire to test the newly-flexible Russian Army, desire to create a land link with the base in Armenia, and desire to punish Georgia for leaving the CIS.

Bonus: It's controversial, but many suggest that the Treaty of Kars gives Turkey the right of intervention if the Azerbaijani exclave of Nakhchevan comes under attack, raising the stakes for any broader war in the Caucasus.