Republicans are worse off today, if only for demographic reasons. They appeal only to white conservatives, a part of the population that is shrinking.
On the other hand, the Democrats have a stranglehold on blacks and are moving quickly towards the same point with Hispanics (thanks in large part to guys like Tancredo and Limbaugh) and Asians. Three groups which will become the majority of the US population by 2050.
From a governing standpoint, much better.
Both of you guys make good points. Republicans in Congress seem to be taking most of their orders from party leadership thus making them seem sellable only to white conservatives. However, on the state level Republicans seem to be doing surprisingly well making it to the governorship in states like Minnesota, Vermont, Hawaii, Connecticut, California, and even Rhode Frikkin Island, all of which usually lean pretty Democrat. Why is this? Because when one is running for a state office they seem more likely to try to appeal to a wide demographic to get into office. I find alot of governors (both Democrat and Republican) to be quite moderate and I think that has to do with alot of states electing them to counteract the strong liberal/conservative bias in each given state. Now that is not to say that Republicans are kicking the Dems asses when it comes to state governorships, in fact the opposite is true. But right now it seems that the GOP's strongest place to sell is in governorships. All they have to do is encourage moderates to run in more traditionally liberal states to counteract the loons. Believe it or not there are plenty of people in those states who can't stand super liberal politicians, just like it is true in the South. As conservative as my state is (Oklahoma), we have a moderate Democrat as governor who won re-election with 65% of the vote in 2006. Just saying.
That is not to say they shouldn't try the same strategy on the federal level. The last thing the GOP needs right now is more crazies running for office. I think they should stick with their fiscal conservatism but maybe adopt some at least socially moderate positions if they want a chance in hell to not only regain traditionally red states they lost last election but also offices up north or even out west where loony left politicians are running or holding offices. Just a thought.
State politics tends to be far less polarized and partisan than national politics. Throughout the country (and throughout history) governorships are often competitive even when national politics aren't. So there are plenty of Southern Democratic governors, and Republican governors in places like Connecticut and Massachusetts.
Don't forget Hawai'i or California, or Vermont.
Or Wyoming for the Democrats; I don't believe it qualifies as 'Southern.'
