The problem with nominating a moderate is 1) The views of a guy like Giuliani on social issues do not match either those of the GOP faithful or most Americans (for instance, most Americans are not friendly to the gay rights agenda as evidenced by the near-universal success of marriage protection referenda at the state level). 2) The game theory aspect. Since 1980, if a liberal Democrat wants to get elected nationally, he has had to move to the center on economics and not forcefully advocate the sorts of liberal social ideas that votes view as, well, kooky. When you have a moderate like Giuliani against an either moderate Democrat like Clinton or a liberal masquerading as such (Kerry), the election quickly devolves away from the big issues like size of the Federal government, size and method of taxation, American foreign policy, role of the government in issues like gay marriage, to "who of these two near-identical candidates will give me more of someone else's money?" Obviously, Democrats win that hands down. We lose that fight because we want to give people back more of their own money (tax cuts) and less of other people's money (welfare).
As for whether Giuliani would govern in a fiscally conservative manner, the general perception is that moderates tend to side with large government regardless of what they may say otherwise. The temptation to give people other people's money is too large for a politican to overcome unless he or she has a strong ideological backbone.
Nothing "moderate" about Hillary at all. She's as left as it gets.