The war is a stalemate, although long term the Kaddafi forces are likely to lose. But in the meantime Kaddafi has long experience in playing the international media and foreign diplomats in general. Kaddafi has dwindling resources, and his only way out is to either make an amnesty deal (which allows him and his family to retire somewhere with some of their stolen fortune) or to re-conquer the country. Both outcomes are unlikely. Kaddafi has a bloody and well documented history as a tyrant and international troublemaker. So giving him amnesty to get him out of Libya is something a lot of diplomats, and public opinion, would vigorously resist. Defeating the rebels is possible, but only if the rebels screw up in multiple areas (don't get oil shipments going, don't use oil revenue to revive the economy, don't keep tribal and political rivalries in check, don't get their fighting forces trained, equipped and organized). The rebels could fail, and that is Kaddafi's biggest hope.
Kaddafi's big edge is experience. He remained in power for so long by monopolizing security and government jobs, and only giving this work to loyal associates. Thus the rebels lack experience in many basic security and government administrative tasks. They have to put together a competent government and military command quickly, because the Kaddafi forces are taking advantage of the current rebel disorganization. The thinly populated interior, where the oil fields are, allows small columns of armed Kaddafi supporters to stage raids on isolated oil facilities (especially the pipelines and pumping stations.) Most of the oil field workforce was foreigners, who have fled. Most of the oil field management was Kaddafi loyalists, who have fled. That spotlights another problem. Like most Arab oil states, most of the dirty, or technical, work was done by foreigners, who are largely gone. This puts a lot of pressure on the few Libyans with the skills, or willingness, to take on the chores the departed foreigners took care of.
But the trends, over time, will be a declining number of successful attacks by Kaddafi forces, and the increasing ability of the rebels to run their portion (over two-thirds) of Libya, and muster forces to take over the Kaddafi held western Libya. But getting from here to there will be messy. Kaddafi will use the civilians he controls as hostages, to extract food and other aid, and to use as human shields against NATO air power. The rebels will continue to screw up their military operations. Friendly fire casualties from NATO air strikes won’t go away for a while.
Kaddafi keeps calling for a ceasefire, but is vague on its details. Kaddafi has so often lied in the past that he has little credibility now. Thus he is, as always, difficult to negotiate with. Meanwhile, NATO officials insist that their bombing attacks in Tripoli are not an effort to kill Moamar Kaddafi or members of his family. But these attacks do seek to kill the leaders of the Kaddafi forces, and that would be Kaddafi himself and his three sons (and other clan members). So the NATO denials are just for, well, political correctness. It's another way of saying, "we're fighting a war, but we really don't want to hurt anyone, and if we do, we are so sorry."
Kaddafi appears to have a manpower shortage, and has been calling for volunteers, to take up arms, from among his civilian supporters. Kaddafi has not got a lot of civilian supporters, so teenagers, and kids as young as 11-12 are being armed and shown how to load and shoot the weapons. When it comes to controlling unarmed civilians, a 14 year old with an AK-47 can be very effective. Kaddafi also has to deal with the growing number of rebel attacks on towns between Misarata and Tripoli. The situation is fluid along the coast road, and, at different times, columns of rebel vehicles head west, and Kaddafi loyalists go east. Kaddafi has apparently ordered his supporters in other parts of the country to go out and "capture" towns and villages not occupied by armed rebels, to help reduce the pressure on Tripoli.
May 1, 2011: Growing unrest and lawlessness in Tripoli has persuaded the UN to remove its operations from the city. The UN will keep its staff in Benghazi, and maintain close ties with the rebels.
In the western, but rebel held, city of Misarata, Kaddafi forces fired artillery at the port, interrupting the unloading of aid ships. NATO and the rebels forces have been having a hard time finding and destroying these artillery weapons (mostly truck mounted rocket launchers). The Kaddafi forces keep them in garages and warehouses outside the city, only bringing them out to fire on the city, particularly the port area. The rockets are unguided, but accurate enough to hit populated areas, and large targets like the port facilities.
April 30, 2011: NATO aircraft bombed a military headquarters in Tripoli (and the bunker underneath it). Kaddafi forces immediately announced civilian casualties (a Kaddafi son and three grandchildren). NATO later called this a hoax, and that dispute has not yet been resolved. In response to the attack, Kaddafi called out his loyalists to attack and loot the empty embassies of Britain and Italy. These two countries had already withdrawn their diplomats from Libya.
Pro-Kaddafi gunmen attacked the rebel held desert town of Jalo, south of Benghazi. At least five people were killed before the attackers fled. The column of vehicles carrying the Kaddafi forces are living off the few towns and villages in the southern desert. Most of these places have no armed rebel presence, and when the Kaddafi gunmen roll in, they can take what they want.
April 29, 2011: On the western border with Tunisia, Kaddafi forces recaptured the Dehiba-Wazin border crossing and pursued the rebels into Tunisia. This led to a brief battle with Tunisian forces. While the rebels have lost the recently captured border crossing post, they are still active in the hill country along the Tunisian border, and the border post has changed hands several times already. Over 30,000 Libyans have fled into Tunisia to get away from the fighting along the border.
In Tripoli, anti-Kaddafi demonstrations were held for the first time in several weeks. While most of Kaddafi's popular support is in western Libya, many, if not most, Libyans in Kaddafi controlled territory are anti-Kaddafi.
April 28, 2011: In the southeast, a column of Kaddafi gunmen seized the town of Kufrah, near the Chad border.
April 27, 2011: NATO aircraft bombed a factory building, killing twelve rebels. It was another case of poor communications between rebels on the ground and NATO aircraft overhead. The rebels acknowledge that they have to solve the communications problem, and beef up their military leadership in general, if they are to defeat Kaddafi, and keep rebel casualties down. NATO estimates that over 20,000 people may have died in three months of Libyan violence. Most of the dead have been civilians, caught in the crossfire, or deliberately targeted by Kaddafi forces.