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I believe the major parties still have differences, but sometimes political expediency trumps ideology (on both sides).
Look at our last two presidents. Clinton backed down on universal healthcare, gays in the military, adopted welfare reform, things of that nature - all of which are not true to Democratic positions.
Bush, it seems, is doing just the same in reverse: he has increased non-defense discretionary spending by 18% since he took office and has not vetoed a single spending bill, according to the Cato institute - not very Republican policies.
The biggest difference these days can be seen in demographics, really. Most Christian fundamentalists and a majority of rural citizens vote Republican, while minorities (with a few exceptions like Cubans) and those in an urban setting tend to vote Democratic. The policy of the two parties usually reflects a desire to maintain their 'coalitions'.
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The tragedy of life is what dies inside a man while he lives.
-- Albert Schweitzer
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