Why would you think turning the party over to a liberal Republican like Schwarzenegger (which Giuliani is) would be better than turning over to a Democrat?
It would be worse, guaranteeing eight years without a conservative in the White House and guaranteeing no chance of the GOP regaining Congress.
As proven by Schwarzenegger, the same liberal legislation ends up getting passed when a liberal Republican is in office. In fact, at a national level, it is easier for a liberal Republican than liberal Democrat to pass such legislation.
Actually it is worse than that. Schwarzenegger has been able to pass MORE liberal legislation by twisting arms of those in "his own party"--people who would have stood strong against the same issues had a Dem Governor been trying to persuade them. He also touts things as "bi-partisan" when the only "Republican" in the mix is Arnold.