Yes, he is past his prime, there is no argument about that.
The question is, how far past his prime? I don't think that far. He's still good enough to win pretty much everything, but I doubt we'll see the same ridiculous dominance we've seen for the past few years. He had to slow down at some point, it was inevitable (obviously), and it's happening now.
Yeah this is real test for Roger. So far he's been beating up guys who are at similar ages(roddick,hewitt) or older(agassi).
Now, the emerging main competitions are 4-6 year younger than him(Djokovic,Murray,Tsonga,Nadal,maybe Baghdatis?). Well some are not quite fully-emerged but we all can sense they are coming.
This is when we going to see what Federer is really made of.
Sampras lost his high dominance when some young players came along (like 5 years younger) but he somehow cling to #1 a few more years with Wimbledon and indoor carpet.
Then he eventually knocked down by players who are 10 years younger than him (Hewitt, Federer).
All of top 5 all time greats dominated about 10 years. No one seems to be able to overcome 10 year difference.
Federer now about 5 year dominance and 5 year younger competition emerging.