Can the two party system survive the information age?
yes, it will, barring massive constitutional changes. First past the post elections inevitably lead to a two-party system.
The Canadian NDP and BQ, as well as the British Lib Dems, would like to have a word with you.
EDIT:
And Mexico, despite having a Presidential system, has a functioning three-party democracy.
Parliamentary systems breed a somewhat different style of party democracy that is more open to third- and fourth-party movements. As long as the US has the Electoral College and to a lesser extent the Presidency, the US will have only two parties.
Jacob also brings up an important point. The NDP and the Lib Dems focus heavily on localized campaigns. That's much more difficult in the US where districts are both gerrymandered so badly that they rarely form coherent communities and large enough that it is very difficult to run a true "grassroots" campaign.
But some of your information is wrong, Jacob. The NDP is basically a socialist party (less so now than it used to be, but still at least on the left side of social democracy) and would never form a coalition with the Conservatives. In fact, Canada has a tradition of government by parties short of a majority without seeking coalition partners. Instead, they pass confidence votes by trying to scrounge up enough support from the opposition parties.
