There's good news and bad news from Pew. The 2008 Presidential race seems to be ours to lose, but whether Democrats can capitalize on voter's growing disillusionment with Republicans by turning our party's image around, remains to be seen.

First, the good news.
Political Landscape More Favorable To Democrats:

Increased public support for the social safety net, signs of growing public concern about income inequality, and a diminished appetite for assertive national security policies have improved the political landscape for the Democrats as the 2008 presidential campaign gets underway.

Yet the Democrats' growing advantage in party identification is tempered by the fact that the Democratic Party's overall standing with the public is no better than it was when President Bush was first inaugurated in 2001. Instead, it is the Republican Party that has rapidly lost public support, particularly among political independents. Faced with an unpopular president who is waging an increasingly unpopular war, the proportion of Americans who hold a favorable view of the Republican Party stands at 41%, down 15 points since January 2001. But during that same period, the proportion expressing a positive view of Democrats has declined by six points, to 54%.