You said:

It's as if the U.S. is bogged down in the middle of a sectarian civil war in Iraq.

I have a slightly different take on this.  I've been commenting a bit on this issue for the last few weeks.  I do NOT see this as the US being trapped in the middle of a civil war.  We are not in the middle at all.  Instead, we have clearly chosen sides.  The important thing to note, however, is that at this moment we are in the process of changing sides.

During the early years of the Iraq war, we generally supported the Shiites against the Sunnis, whom we labeled as the "pawns of Al Qaeda."  However, we are now shifting sides.  The US is suddenly declaring the big boogeyman Al Qaeda (which was never more than a tiny portion of the insurgency) to be defeated.  Now, the Sunnis are suddenly our allies and we are fighting against the Shiite, whom we now label the "pawns of Iran."

I predicted that casualties would be low (comparatively) this month, and that now appears likely.  This change is NOT because of any success from "the surge," but because of a fundamental change in what is happening.  Quite simply:

The old war is ending.

The Old War--the US+Shiite v. Sunni War--is ending.  A number of Sunni groups are now taking payment from the US.  Other have reduced attacks while the watch a change in the US posture.  Additionally, the US is reducing attacks against Sunnis.  All of these create a significant reduction in the US casualty rate as the war effectively ends.  However,

A new war is beginning.

This new war is the US+Sunni v. Shiite War.  We are already seeing its beginning.  We are seeing more and more media hits attacking Iran and Shiites in general.  Just today, a US attack on Sadr City killed 33 "terrorists" (according to the US) or dozens of civilians (according to the locals).

It may sound pedantic, but I think it is incredibly important to understand that these are two different wars, not just the US caught in the confusion of keeping apart two different sides.  Understanding that these are two different wars helps us understand what is happening.

For instance, the body counts.  On November 1, rightwing commentators will crow that casualty counts are way down and the surge is working.  But that is not what is happening.  As the first war winds up, obviously casualties drop.  The new war is beginning, but it is still in an early phase.  Remember early on in the first war?  The casualty counts were (relatively) low, but steadily increased over time.  The same will happen in this new war.  Casualties will seem to drop, but then increase over time.

Understanding this "new war" will also help us understand changes in the US strategy.  Anbar Province is already being relabeled as a paradise.  Soon, money from neighboring Arab monarchies will flood in and we will be told how exciting and empowering it is have the Sunnis in control of their own territory.  Likewise, more Sunni officials will likely be forced into key security ministries of the Iraqi government as the US seeks to shape these in a more pro-Sunni direction.  We will also hear more stories of evil and abuses from Shiite policemen and soldiers, and of heroic US troops who arrest these Shiite soldiers.  We will likely not hear that the newly-hired replacements for those arrested will be Sunni.

We can also understand certain British moves in Basra.  When the US was fighting the Sunnis, the British were comfortable covering our rear and taking relatively low (though not insignificant) casualties.  As the Shiite areas of Iraq become the frontline, the British are in the process of redeploying.  They are removing most troops from Basra city, for instance, and redeploying them to the outskirts, to Kuwait, or back to Britain.  The US will thus fight on the frontlines of this new war without allies, just like in the last war.

In some ways, it seems like to word-game to call what is happening two separate wars instead of one big and confusing civil war.  But I believe this analysis is absolutely critical to understanding the events that will come, the motivations of the actors, and how best to define a plan for getting us out.