The Iraqi Army and police are doing most of the fighting up north, which is bad news for al Qaeda. Iraqi security forces speak the language, and have a good understanding of the social dynamics. Many of the tribes and clans (including some of the Sunni Arab ones) up north are pro-government, and as the terrorist organizations get chewed up month after month, more and more locals decide that loyalty to Saddam just isn't worth it any more.
Knocking down the various enemies inside Iraq while building up the capabilities of the Iraqi government's forces has finally, this year, allowed the Iraqi government to take on the insurgents and terrorists with minimal direct help from our forces. This is the benefit of atomizing our enemies to keep them from being able to mass in units too large for the improving but still fairly green Iraqi security forces. Iraqi forces will never be as good as our units. But the Iraqis no longer have to be that good because the surge.
