Well UKIP certainly won it for the Lib Dems in Torbay, that would have been a Tory gain without them.
You won't find too many people here who are not critical of the Conservative Party's stances on certain conservative issues, such as foreign policy/Iraq. The reason they aren't winning elections is because they are trying to be Labour lite, and it simply does not work. The Democrats tried a similar strategy over here with the "Anybody but Bush" type campaign, but they offered nothing themselves. Probably the same main reason that Michael Howard isn't moving into 10 Downing Street.
What the Conservatives need now is a young, energetic, and visible leader who will excite the conservative base and offer a clear vision for Britain's future. Who that person is, you got me.
My prediction is that Sir Richard Branson steps up to the plate.