I think the Democratic Coalition should be branded as such. There is a lot of good will for the Democrats and Obama in the States even on this side of the border. So the Democratic brand is something that the Coalition people should latch on to in order to make the idea of a Democratic Coalition permanent and a concept of unite the (centre) left against the united Right.
With the squelching of Bob Rae and the rising of Michael Ignatieff, the 'Unite the Left' has lost a round. However the Unite the Right lost many rounds (CCRAP, DORC, Joe Clark, etc) before it got it right. It may take the Liberals a couple of elections to realize that they cannot obtain power unless they are in a coalition with someone else. I think it will take more than Iggy's waxing eloquent on the sweet smell of manure in Richmond Quebec to get the Liberals a bounce in the rural areas, especially as it is becoming clearer that the best way to oppose Tories in rural areas is to vote NDP, as they have known in Western Canada for some generations, and as they have just learned in Ontario.
Perhaps a Democratic organization could be set up which organized primary elections for MP candidates and for Leader of the Democratic Coalition. In each riding a Democratic Club has organized a Primary (which it has allowed all registered Democrats to vote in without charge), where the Liberal Democrat, the New Democrat, and possibly the Green Democrat have run for the Democratic imprimatur. Consitituent parties of the Democratic Club would then agree not to run candidates against the winner, the winner being the peoples' choice. This would prevent vote-splitting, and eliminate the need for strategic voting on the Left.
Democratically-minded Conservatives would probably want the same thing, and the Conservatives and Democrats could have their primaries in the same place and at the same time so that people could vote on one slate or the other, probably even both. At that point, Elections Canada could organize it.
There are many ways to this goal. The New Democrats could rebrand themselves to the Democrats, and allow the primary process to include Liberal Democrats and Green Democrats. Although the people at large would select the candidates, Party members would still set policy and be involved with organization. As the Alliance was the ideological party which instigated the merger on the right, it makes sense that the NDP is the ideological party which should instigate the merger on the left.
There will likely be many false starts before this project is complete, however there are many on both sides who would like to see a return to a 2-party system, which our parliament was designed for. With 2 parties, a majority generally means a majority, rural gerrymandering notwithstanding.