After the 2004 election I was quite vocal about wanting a viable second party. I will say the Democrats have come quite a long way since then. If you take the new blood on the scene in Jim Webb and Harold Ford you will find very little of the baby-boomer narcissism and navel gazing that affected most of the 2004 candidates.
There is starting to be a concensus plan on Iraq among Democrats as well, in the form of partition. I think that is the option we will take (along with looking the other way on ethnic cleansing) once all the others are exhausted, which should be in around 10 months or so.
All that being said, none of them are any closer to me ideologically (except for the partition, which I do like) than the Republicans but new blood will probably not be as talented at corruption as the current folks.
Not that I think the dems will take the House or Senate, but I do think they will take some seats.