The more radical Democrats of the far left, as opposed to the more moderate centrists, have been rabidly oppositional to Bush since the election of 2000, when he refused to roll over and play dead during the great hanging-chad multiple recount controversy.
In large part, the defeats of Gore and Kerry were largely the result of the failure of Democratic leaders to nominate a true centrist who could appeal to mainstream America. Whether fair or not, the perception of many average Americans was that Gore and Kerry were merely cleaned up and glossed over 60s radicals. That fact is reflected in the election day maps of blue and red states, which reveal in stark detail the Democratic Party's failure to make any inroads in the bedrock conservative areas of the country.
The hatred of Bush by the left wing of the Democratic Party is so bitter and vitriolic there is scant hope that there could ever be any reconciliation between them and the President. That hatred is reflected in the rhetoric emanating from the left: Bush doesn't make mistakes...he lies, cheats, manipulates, and attempts to subvert the constitution.
Unless the Democrats can abandon that attitude, and squarely face their own shortcomings and the real reasons for continued Republican control of Congress, then they will continue to lose elections. Control of Congress is decided by elections at the state and local levels, where familiarity and satisfaction with a candidate are most often the deciding factors in who the citizenry elect.
This is not a Presidential election year, so large portions of the electorate may not see the November election as a referendum on Bush. The Democrats may close the gap, but I cannot see them gaining control of both houses of Congdress. At best, they may only achieve parity of numbers...and the national legislature will become even more contentious than it already is.
Nominating Hillary Clinton in 2008 would only demonstrate that Democratic leaders refuse to learn from their mistakes. Current polls notwithstanding, when push comes to shove, many heartland voters will not trust her enough to vote for her.
So, Democrats need to plan their next steps very carefully...or they could very well shoot themselves in the foot again.