An increasing number of Kaddafi supporters, of all sorts, are reconsidering their allegiance. In short, there are far more people going over to the rebels than the other way around. The basic situation is that Kaddafi is cut off from the world and being pounded by NATO aircraft, as rebel ground forces keep pressing in. NATO lawyers are talking war crimes trials for Kaddafi, and many of those close to him don't want to be dragged into that. Another incentive to physically get away from Kaddafi is his threat to use his supporters as human shields outside buildings and military bases threatened by NATO air attack.
Most Kaddafi supporters are in Tripoli and people there know that the NATO air strikes are very precise and cause few civilian casualties. They know that Kaddafi's Information War campaign to stop the bombing, by deceiving the world into believing that NATO is killing large number of civilians, will fail. The rebels smell victory, and will not agree to a ceasefire or truce. So the defections will continue and increase. And so will the bombing.
There is another, less visible, war going on, where NATO (including U.S.) intelligence forces keep track of Kaddafi forces and supporters, to determine which of them will be missed the most, and bomb these key targets. This target selection process has been around since World War II, and has grown more powerful, and effective, as the decades rolled by. But for it to work best, it is done in secret. The decisions are only revealed when the bombs hit, and sometimes not even then (when some less valuable targets are hit to deceive the enemy).
The new targets include oil supplies and government buildings. Some Kaddafi forces, that have moved outside Tripoli to escape the bombers, have been hunted down by intelligence collection aircraft and satellites, and bombed wherever they are. For example, the Berbers, living in the mountains to the south (that rise abruptly from the coastal plain that Tripoli sits on), are organized and hostile to Kaddafi. Efforts to control the Berbers have been a growing drain on Kaddaif's military forces. This is important, because the Benghazi based rebels, advancing along the coastal road are getting closer, partly because of Kaddafi forces being distracted by the armed and dangerous Berbers.
The rebels have been putting together a new government (currently the TNC, or Transitional National Council), and this includes replacing the pro-Kaddafi civil servants who fled, or were ousted (for bad behavior like corruption or incompetence). But the rebels are a diverse and contentious collection. Some are Islamic radicals who want a religious dictatorship. This scares away foreign nations who might otherwise provide more military and economic aid, as well as diplomatic recognition. The rebels have gotten organized enough to send representatives abroad to try and convince the world that Libya won't turn into another Iran or Afghanistan. But that danger is real, and a lot of Libyans are worried about this as well.
The fighting has, so far, caused 800,000 Libyans (12 percent of the population) to flee their homes. Over 90 percent of those have fled the country. Libyans are very dependent on imports (paid for with oil revenue). The rebels have emphasized restoring the use of ports. Misarata is handling more ship traffic, despite Kaddafi forces trying to plant naval mines or send in speedboats loaded with explosives. But as long as Kaddafi isn't getting much economic help, and the rebels are, the rebels are going to win.