I've said all of this before, but this fellow says it so much better:
Much of Democratic politics seems to now consist of embracing and fanning similarly comforting, but ultimately deceptive, liberal memes. Enron has fatally damaged Bush, Abu Ghraib has fatally damaged Bush, Katrina has fatally damaged Bush, Abramoff has fatally damaged Bush, the Plame investigation will fatally damage Bush--you can catch the latest allegedly devastating issue every day on Huffington Post or Daily Kos (and frequently in the NYT). If you believe the hype--if you don't compare Michael Moore's box office with Mel Gibson's box office, in effect--you'll believe that Democrats don't need to change to win. They just need to push all these hot memes forcefully. If you don't believe the hype--if you think that netroots Dems are too often like the Iraqi Sunnis who think they're a majority--you'll look for a Bill Clinton-like alternative with greater red-state appeal.
But there's no hope of them ever getting wise, certainly not in time for 2008, anyway. They are in the process of trying to rid themselves of apostates like Lieberman who actually might appeal to a majority of voters.
Republicans are not prone to this. They've got the mainstream media disrespecting them all the time and spinning things to make Republican policy sound out of the mainstream. Their problem is exactly the opposite -- they are a majority without the confidence to act like it.