The Republicans lost in the Blowout Belt because of three reasons: 1) The Iraq War, while being al Qaeda's Vietnam, has been a propaganda loss for Bush's party, 2) Corruption has been following the Republican Party in House with the party paying little attention to it and 3) the Republican Party has become the party of the establishment while ignoring the small government conservative/libertarian base.
The Democratic Party won the House with because of two reasons. 1) The Democrats won in the suburbs which will be swing areas for a while. The suburbs like corruption-free, low taxes, and budget surpluses. 2) In the Great Lakes states and in the Southern states yellow dog and Clinton-style Democrats won while promising to lead from the center.
2008 could go either way. The Republicans must find a way to neutralize the Iraq issue and prove it is loyal to the base on issues like spending and border control. Democrats have two roads to go down. If they operate like Bill Clinton or Joe Lieberman they will be neigh-on-unstoppable; however, if they let leftists bloggers control issues like the War on Terrorism then Republicans will be back in a heart-beat.
On local issues it seems America is still a center-right nation (ballot issue results). Several states passed laws defining marriage as between a man and woman, medical marijuana was defeated, Michigan has passed a law limiting affirmative action, and while South Dakota did reject its abortion ban polls say that one which would allow a rape exception would pass easily so expect that bill to be back.
The 1990s saw Clinton try to rebuild a Democrat Party in disarray infected by 1960s radicalism, he succeeded in part but failed to keep his DLC in firm control. The 2000s had Bush trying to build a permanent Republican Majority but it appears that Washington's atmosphere had led the Grand Old Party astray. The future is open in Purple America.
Catholicgauze congratulates the Democrats on their win and reminds them to govern well. To Republicans Catholicgauze tells them to take the loss as grown-ups and learn their lesson.