Indeed. The war would've gone on even more poorly.
Of course, so in Hitler's mind, he had to strike first. If he lost, if his great fatherland lost to Stalin of all people, his ego would be damaged. He just got crazier after that, not to say that he wasn't already mad. I bet the defeat, or "strategic retreat" as they called it, wrecked whatever chance they had at the negotiations you suggested. However, negotiating with a white supremacist madman could not possibly go well. I doubt he ever had negotiations on his mind. (Keep in mind, even if nazi germany captured Moscow, there's still another half of Russia to capture. And those poor people had just gone from starving to death under a tsar to living under a strict communist government. They've taken a lot of crap, and finally had a government that they "wanted". I have no doubt that Russia would've fought back no matter what, not wanting to be ruled by another country. If Germany had made it that far, the victory wouldn't last. Also, considering the size of Europe and the size of Russia, the Germans would be stretched quite thin.)
The tank divisions that the nazis sent weren't really made for the conditions in the city, so in the end, it came down to the snipers eliminating virtually all opposition in the building-to-building fighting in Leningrad that I referred to earlier.
Imagine the devastation if a hydrogen bomb had to be dropped in Europe. I think the allied powers would still win, but everything would've been so much worse. As for the "three way cold war standoff", there's your nuclear WWIII. Never forget that Hitler is a ruthless, crazy dictator. As soon as he were able to directly attack the US, Britain, & USSR, I'm sure he wouldn't hesitate to do so.
I am having an excellent holiday thus far, thanks for asking.
. . . I can read your pokerface.