What the heck? The Libyan regime collapsed? Overnight? And it is all over except for the bloodshed - it sounds like Gaddafi escaped a Ceaușescu fate by the skin of his teeth. If he's running for his home hamlet, he's finished. If he's using foreign mercenaries to butcher protesters, that means that he can't trust the military. You can't hire enough mercenaries, or pay them enough, to face off against your own army, unless your country's a lot poorer than Libya.
And seriously, when they're fighting pitched battles in the street with snipers and militiamen, I think it's safe to call them armed rebels rather than "protesters". Libya's a totalitarian state, if the party's lost control of their second city, then they won't take it back without a full-on Hama assault. I don't think Gaddafi's army is big enough to pull of a Hama, even if he could trust it enough to lead it into battle.
I'm not sure what to think of the politicians complaining about Gaddafi's forces' treatment of the protesters/rebels/street-fighters. What, were these people born yesterday? He's a scorpion, a bloody-handed vicious pocket Stalin. You think he was going to go "hi, sou desu ne" to street protests? Of course he'd try to slaughter them, that's what thugs like him do. What's interesting is that he tried it - and failed. Assad the Younger must be [censored] a brick right now. The Algerians must be absolutely panicked. I betcha they're cutting deals with anyone who might possibly lead a populist revolt, because Gaddafi's a heck of a negative example right now.
And before anyone gets too high on street theatre, Gaddafi's police state won't be replaced by a European social democracy. The ideas laying about prior to a crisis are what are used to resolve the crisis, and the alternative in Libya is your basic Islamic Republic toolkit. It's going to be ugly, mark my words.