The two largest political parties in Brazil are the PT (Workers Party) and the PDSB, with the Democrats following close behind. The PT thinks of itself as a left-populist party with a strong blue collar base of support, while the PDSB are center-left, with large support from "urban professionals." Lula's shift to the center has caused an identity crisis for the PDSB, however.
The Democrats main problem is that they are seen as the heirs of the ruling ARENA party that ruled during the dictatorship. As mentioned earlier, however, the main problem is incompetance at all levels, and an inability to grow the parties base of support away from the rural regions.
I don’t know what the hell Lula is up to these days. I don’t trust him, and I have a nagging suspicion he may be playing the equivalent of good cop/bad cop with Chavez, but their goal is still the same: Complete totalitarian leftist domination of the Americas.