Despite the large number of attacks on Iraqi targets, coalition troops are still getting ambushed or sniped at some 30 times a day, more than double what it was last month. That means that each patrol or movement (by a convoy) has about a two percent chance of getting shot at, and each soldier has about one chance in several thousand of getting killed or wounded.
The coalition strategy is still to select, train and arm as many Iraqi security troops as are needed to deal with the Baath Party resistance, foreign terrorists and local criminals. The Baath Party group is seen as the easiest to defeat, as they are largely former Saddam government employees from the Sunni Arab minority. Not all Sunni Arabs supported Saddam and only a minority of them are supporting the resistance. A lot of this cooperation is paid for by large hordes of cash kept by a few Saddam supporters. Hunting down the Baath Party leaders, and seizing them and their money, takes a lot of enthusiasm out of the resistance. The more Iraqi police and security troops there are out there, the easier it is to track down and arrest the Baath party leadership. A lot of Iraqis hate the Baath party in a big, big way.
The foreign terrorists are easier to spot because most of them are not Iraqi (and many of them are Kurds from the north; members of Ansar al Islam.) The attacks on mainly Iraqi targets has done much to inflame public opinion against terrorists, and the governments of neighboring countries that have tolerated terrorists for so long (particularly Saudi Arabia, Syria and Iran.)
The criminal problem is major. During the decades of Baath Party rule, criminal organizations were used to help control the population and for operations against other nations. The Baath Party had several secret police organizations to keep the criminal gangs under control (and make sure they did not prey on anyone they were not supposed to.) More Iraqi police will help, but mainly with the common criminals (individuals rapists, murderers and thieves). The criminal gangs know how to bribe the police, and work with them. Many Iraqi police are still corrupt, and eliminating that culture of corruption is a major obstacle to establishing an effective government.