1. I'm a pretty hard-core Libertubplican, but even I realize the inevitable in 2008. We're in the midst of a 1994-1996-1998-2000-like swing in the electorate -- wait another four or eight years, the pendulum will swing back. The Dems will gain, they'll propose "radical" change, people will complain about those onerous regulations leading to higher prices and the higher taxes they have to pay for a bucketload of new pork/entitlement programs, et al, and then it'll swing back. The country is in a real anti-government, anti-incumbent mood right now ... we've even seen it hit incumbent Dems in local races.
2. Yes, Republicans tend to be more pro-free market, and so the business lobby will step its act up now. But don't think the business lobby won't step its act up with a Dem administration/Congress, too, and get a little bit of what it wants. And don't think the union lobby is going to get everything it wants with a Dem congress/administration -- especially with regards to immigration.
There's pork & favors to be passed around in administrations of every stripe. In 1994, I used to think Republicans were anti-big government, pro-federalism and anti-wasteful spending, but the big spending and centralization of power in Washington has continued. We used to think the Dems were protectionists who were against free trade, but Clinton signed NAFTA. It's just that Republicans and Democrats have slightly different priorities in how they waste your money and where they concentrate government.