The New York Times consistently has the best coverage of Iraq. That's probably because they're the only major US-based news organization that still has permanent staff in-country. Yesterday, they had a very good article about how Iraqis see Americans. It's well-written and discusses some of the subtleties of the relationship that have profound implications for the long term.
Last week, they had another article about how Iraqis of all groups are co-existing, and even having fun together. There is a large lake out west, in Anbar Province. Now the lake is a destination for day trips for thousands of people from Baghdad and the surrounding area. People are doing what people do at lakes or beaches anywhere: swimming, playing, dancing to music, flirting, having fun.
For a couple of years, the Times has carried a blog written by their Baghdad-based staff, almost all of whom are Iraqis. That blog has now morphed into one called "At War" and covers Afghanistan and Pakistan as well. It seems to have lost some of its personal flavor and become a collection of somewhat impersonal op-ed pieces, but there are still some good postings that provide an insight beyond the headlines.
Most news reports about Iraq seem to focus on death, destruction, and political problems. News outlets always seem to prefer bad news stories. Sells more papers, I guess. But there's another side to the story. Most of us who came here of our own volition did so to try to make a difference in the country. Here's a press release from the Corps of Engineers about a project that was just finished. Yes, it's a press release, so it's not an "unbiased" bit of reporting. That doesn't change the fact that this is a success story, about a large project we (and you - it was your tax dollars that paid for it) have completed. It'll make a difference in the lives of a lot of young kids.