As for the macroeconomy, the Democrats offer few policies except to refuse to extend the Bush tax cuts, which in important cases don't expire till 2010. On foreign policy, their stands tend to be incoherent: We should be more multilateral in Iraq and less multilateral on North Korea. "Redeployment" of troops from Iraq to Okinawa (John Murtha) or Kuwait (Hillary Rodham Clinton).
The Democratic plea is that the Republicans should be punished for incompetence. But even with majorities in both houses of Congress, Democrats will be poorly positioned to offer competence itself. You can make a good case that the Republicans have run out of ideas -- they've implemented most of Bush's 2000 platform (tax cuts, education accountability, Medicare changes, more defense spending) and have conclusively failed to implement others (Social Security individual accounts). But Democrats don't have much in the way of ideas to advance in their place.
If a Democratic victory presages realignment, we should see some evidence of that in the polling for 2008. But we don't. Which party has candidates that can poll above their party's 1996-2004 ceilings -- 49 percent for Democrats (Clinton 1996), 51 percent for Republicans (Bush 2004)?
Republicans pretty clearly have two, Rudolph Giuliani and John McCain. Democrats can hope that Hillary Rodham Clinton, with her carefully calibrated stands on Iraq and foreign policy, and her bipartisan work on some domestic issues, could be another. So, if he decides to run, could Barack Obama. Another might have been Mark Warner, but he's not running.
The polling showing Giuliani and McCain well ahead of Clinton and other Democrats suggests that national security -- who can best protect the nation against those who are seeking to destroy us? -- can still work for Republicans and that domestic issues don't necessarily work for Democrats. Competence may defeat Republicans in 2006, but that doesn't mean that ideology can win for Democrats in 2008.