Check out this article from a couple of Brits who write for the economist. They think the GOP and conservative future in the U.S. is very bright.
Here's an excerpt:
It is true that, since those glory days, the Republican Party has lost some of its discipline. Once-loyal members of Congress have defied a threat of a presidential veto on both highway spending and stem-cell research. It is also true that the liberal wing of the party is enjoying an Indian Summer. Opinion polls suggest that John McCain and Rudy Giuliani are the two favorites for the Republican nomination in 2008.
But is this loss of steam really all that remarkable? All second-term presidents face restlessness in the ranks. And the noise is arguably a sign of strength. The Democrats would give a lot to have a big-tent party as capacious as the Republicans'. One of the reasons the GOP manages to contain Southern theocrats as well as Western libertarians is that it encourages arguments rather than suppressing them. Go to a meeting of young conservatives in Washington and the atmosphere crackles with ideas, much as it did in London in the heyday of the Thatcher revolution. The Democrats barely know what a debate is.