What do you recommend in the immediate aftermath of this post 9/11/01 era? in the long-term aftermath?

Depends a lot on your time horizon, your portfolio composition, and your personal preferences. If you have some degree of investment saavy or even wannabe saavy, plus a decently large portfolio, it would be a good idea to learn how to buy individual bonds, even if it's just government bonds through Treasury Direct. There's a lot to be said for cutting out the middleman and saving the mutual fund expenses, when you do your own shopping. Otherwise, for longer term holdings, an intermediate term bond index might be right, while short term holdings should probably prefer a GNMA.

If your portfolio is already heavy on stocks, it might make more sense to go with the GNMA anyways, regardless of time horizon, to take advantage of the lesser volatility as a balance against the stocks.