The Israelis encountered stiff defense and unexpectedly effective Russian and Chinese weapons which did real pain to its tank force -- but this is what happens in war. The antidote to unexpected opposition is overwhelming force, which will if sophisticated enough always win the day. The IDF is far better than just "sophisticated enough".
with Olmert sending in a tiny fraction of Israel's might during the first four weeks, the "humbling" was inflicted by Olmert/Peretz/Halutz/Livni incompetence of Carteresque proportions.
the analog to the Israeli incursion into Lebanon was jimmuh's puny attempt to rescue our 444 embassy hostages in Teheran with five helicopters. Compare this to the IDF use of DOZENS of helicopters when they made they (only partially) successful raid on the Bekaa valley "hospital".
I have read the history of previous Israeli wars. They were surprised before, several times before. They usually pulled together fast. America tended to tamp them down when they were winning.
I agree with those who say the political leadership lost this war. The condition of the military and intelligence is dependent on political leadership as well.