As to the conduct of the Democrats, newly in power, it is important to remember that the new Speaker of the House is a San Franciso liberal and that the party leadership knows very well they could not have brought this election off without the liberal wing of the party. Some of them are undoubtedly unhappy with this, but I think they will, like real politicians, be willing to compromise--unfortunately, they will still be very much in the pocket of the highest bidders, whoever those turn out to be. Congressional Democrats are unlikely to forget how shabbily Congressional Republicans treated them when they came to power; there will be some payback, and perhaps that is just as well. The motivations may be venal, but I think it may also be a kind of rough justice--the leadership, in fact, is probably going to have to restrain the rank and file.
Personally, I think it's important to hold the Republicans accountable for the abrogation of the centuries-old right of habeus corpus. their institution of torture as policy, and their various other horrific attacks on civil rights. The administration proposed these things, and the Republican congresspeople (and some Democrats) voted for them. So far as I am concerned, this is a compelling case against easy bipartisanship. These are not "forgive and forget" things; if the Congressional Democrats were to seek justice, W. Bush would be impeached for crimes against humanity. Likewise, I can see no reason for these people to have any voice in the choice of judges. They don't want justice--they want either a corrupt legal system biased towards them or sympathetic ideologues on the courts, and I can see no reason to allow either.
US foreign policy is made by the President, with the "advice and consent" of the Senate, so unless impeachment is undertaken, we may not expect many improvements in this area. Nonetheless, it is important to begin mending fences globally. With a sympathetic administration, I think it would be best to go to the UN hat in hand, apologize, and beg help in Iraq; while we have no credibility there, the UN still has some, and they might be able to improve matters. The W. Bush administration is of course not sympathetic, which makes it even more important for Congress to do what it can to shore up our relations with the Arab/Islamic world, and with our traditional allies. This problem devolves on the political skills and good will of the Senate Democrats and the good will and diplomatic skills, if any, of the new Secretary of Defense.
Finally, it seems to me we need to revisit issues of the vote and of citizenship. The Real ID Act, which requires the states to turn their drivers licenses and ID cards into citizenship cards, is the worst of these; in conjunction with state ID laws it could drive voter turnouts to below 10% in some states, which is of course the intention--citizenship tests have long been a method of restricting the ballot, going back to antebellum rulings that African-Americans could not be citizens. Then there is the Mexican-American powder keg. For some decades now, US policies have encouraged Mexicans to emigrate to the USA outside of US laws, creating an underclass of workers without legal standing and therefore without the ability to demand decent wages and working conditions. It was to the advantage of our lowest-wage employers, and to the Mexicans immigrants, most of whom are for all practical purposes refugees. We now have an underclass of millions of Mexican non-citizens, who the radical right seeks to use as scapegoats. This spills over to their children, who often are citizens, other citizens of Mexican descent, and indeed to all immigrants. Come the 2008 elections, we are likely to see riots in California and Arizona, as mainstreamed anti-Mexican bigotry clashes with Mexican-American citizens at the polls. It is necessary to defuse this conflict, and the whole situation is political dynamite. And, unless the various citizenship requirements for the vote are dealt with, this issue is likely to come to a violent head in 2008.
This does not even address the many more usual issues of governance facing the Democrats: the budget, the environment, and so on. I see very hopeful signs in this area from Nancy Pelosi; I am less confident in Harry Reid, but he may yet surprise me. Still, we have more to hope for than we did in a Congress dominated by the current Republican Party.