The enemy in Iraq is generally poorly trained, sloppy and led by unimaginative men. In other words, the Iraqi terrorists and anti-government fighters are exactly what you would expect them to be, the same people who kept Saddam in power for decades. But these guys have other qualities as well. They are persistent, and they can be brave. The bravery sometimes needs help, as autopsies often reveal the presence of drugs. But when properly motivated (often by fear for what will happen to their families), the enemy will make daring (and often suicidal) attacks.
The Iraqis are not stupid, and they have generally acknowledged that taking on American troops in a head-on battle is not a good idea. Thus the steady shift to the use of roadside bombs, rocket and mortar attacks on base camps, and lots of terrorism against Iraqi civilians.
The big problem with the enemy is getting their fighters motivated. For the last two years, the Sunni Arab leadership has used a combination of money, and promises of a return to the "good old days" (with Sunni Arabs in control of the oil money) once the Americans are driven out. While thousands of Sunni Arabs were willing to fight for free, most of these quickly got themselves killed. American troops, two years ago, often mentioned the sloppy ambushes, and the ability of U.S. troops to quickly turn the tables and slaughter the ambushers. There were American casualties, but not enough to encourage Sunni Arabs to continue this form of personal combat. So roadside bombs grew in importance, and the more capable people who ran these operations tended to get paid. You could still rope in kids to work for free as lookouts, but most adults wanted cash for their services. Since the Sunni Arabs had monopolized so many of the government jobs when Saddam was in charge, the highest unemployment was now among the Sunni Arabs. Income from building or planting bombs could support a family.
However, the last two years has been a time of constant defeat. Now, with American and Iraqi troops moving through the Sunni Arab heartland at will, and aggressively seeking terrorists, many more Sunni Arabs have given up. In other words, recruiting for terrorist groups is getting more difficult with each passing month. Some of the terrorist leaders have tried to establish themselves as warlords, demanding cash, and other support, from the local Sunni Arabs that he "protects." But everyone knows that the protection is a sham, and that if American or, or even Iraqi, troops roll into the area, the newly minted warlord either has to get out of town, or die in place.
The Baath Party big shots who are still in Iraq, have to burn through a lot of cash to keep the attacks going, and themselves protected. Between the cash rewards, and all those cell phones (that Iraqis use to turn in terrorists), it's getting harder for terrorist leaders to stay out of jail. But these fellows have an excellent incentive to stay free. If they are captured, they are likely to face execution, or life in an unpleasant prison. They can maintain the loyalty of some of their troops by letting it be known that, if the boss goes down, he has the goods on lots of his troops, who will be prosecuted as well for killing Iraqis with bombs and bullets. The terrorists are turning on their own.
How much longer the Sunni Arabs will be able to use cash, coercion and revenge to keep their people killing, remains to be seen. But they can't keep it up forever, and the trends are moving against the terrorist groups.