The Iraqi army always had a terrible reputation, despite vast amounts of money spent on weapons and training. In combat, Iraqi troops have, since the country was founded 70 years ago, been terrible. Poor leadership, poor tactics and a tendency to run away have made the Iraqi army something of a bad joke even by Middle Eastern standards. Iraqis fighting as irregulars against coalition troops are not performing any better.
The fighting in Iraq is still propelled largely by money, with Baath Party leaders holding lots of cash, and using it to buy weapons, and motivate Iraqis to attack coalition troops. Many of the Baath paymasters are military men, or are able to attract more tactically skilled Iraqis to work for them. Iraqis were never noted for their military skill, but the war with Iran in the 1980s (caused by Iraqs invasion of Iran in 1980) became a desperate affair that, by trial and error, created many capable Iraqi combat commanders. Most of these were later run out of the army by Saddam, who feared that competent and popular officers could be a threat to him. Saddam didnt kill all of these guys, most of whom were Sunni Arabs, but retired them or gave them minor government jobs. To stay in Saddams good graces, these soldiers stayed in the Baath Party. Thus when Saddam was overthrown, the Baath Party leadership (which is still largely at large), knew who to go to for military advice.
But while there are a few competent tacticians working for the Sunni Arab gangs, the majority of the of the troops are quite unenthusiastic. American troops note that the Iraqis, even when they outnumber American troops and are in a better position, will break and run when the GIs start fighting back. The American troops are well trained combat professionals, and will respond to an ambush or attack with an immediate, violent and generally lethal response. This almost always unnerves the Iraqis, who then try to flee or surrender. When the Iraqis do stand and fight, they demonstrate little tactical skill or combat training, and usually end up dead or captured. When they are captured, they will often loudly proclaim their innocence. This is unnerving for Americans, as they just saw these guys shooting at them, and caught them with weapons (grenades, pistols) still on them. It just doesnt make sense that they should insist that they didnt do anything wrong.
Where the Iraqis have been most successful is in planning ambushes and surprise attacks. They have been particularly effective with 82mm mortars and RPGs. A recent tactical innovation was having mortars ready to fired on a roadside bomb, either when it went off, or when it was discovered and American combat engineers showed up to disarm or destroy the bomb. Although U.S. troops have a capability to quickly tracks incoming mortar shells back to where they are coming from (using a special computerized radar), and fire back, the Iraqis have ways to defeat this. The Iraqis select firing positions that are in residential areas, and know how long it takes the American return fire to arrive. So the Iraqis get out quickly after firing a few rounds. Usually, the Americans wont fire back to avoid hurting civilians, but sometimes they do, But the Iraqi mortar crew is usually gone.
While Iraqis favor attacks in crowded city neighborhoods or village streets, they have become leery of that because the Americans often set up their own rolling ambush (using multiple groups of troops in armored vehicles plus UAVs and helicopters overhead.) So the favorite target is still the supply convoy rolling down a country road. But the support troops manning these convoys have become combat trained and experienced, and the ambush team often finds itself outgunned and quickly shut down.
The captured gunmen indicate that pay rates for these attacks has steadily gone up over the past year, thanks to the high casualty rate from coalition troops returning fire and counterattacking. As a result, Baath has resorted to some of its old tactic of taking hostages or simply threatening a family if they dont supply someone to help with an ambush or mortar attack.
The Baath also know that if they can get enough violence going, they can get more men who are willing to join in the mayhem because of the perception that the coalition troops wont be able to handle it. Nothing helps recruiting more (and keeps the pay rates down) than lots of guys surviving to regale their buddies with tales of how they fought the Americans (and lived.) There is also the prospect of looting supply trucks that are damaged in an ambush and left behind by the coalition forces as the rest of the vehicles move on.
Baath, and Sunni Arabs with the taint of Saddam on them, know that once the coalition troops are gone, theyre going to have to face a large, well armed, and bloody minded army of Kurds and Shia Arabs. Anything that will delay, or prevent, that from happening is worth spending all that money and risking your lives against the coalition troops.