There is a lot of nonsense in the media about what is going on in Libya and what the so-called “no-fly zone” is achieving.  I would like to make a few short comments to clarify some of the misconceptions about what is taking place.
The ‘no-fly’ zone is, of course, not a no-fly zone.  At least not primarily.  We have all seen how lame and inept Gaddafi’s air force is and shooting down a couple of aircraft really makes no difference whatsoever to the conflict.  So what is called “air superiority” never was an objective of the US operation.
The “protection of civilians” clause of the UNSC resolution is really mostly what is called “close air support”. While a few runways have been bombed and a few buildings or depots destroyed, the main task of the US and now NATO air forces is to strike at the pro-Gaddifi forces engaging the anti-Gaddifi insurgents.  Ideally, that kind of mission is executed by specialized aircraft (A-10, SU-25) and helicopters.  This means coming in low and slow, in a highly maneuverable or even armored aircraft to hit precisely at the forces directly engaged on the front line.  This is *not* an attack on follow-on forces, on second echelon forces, but a direct engagement right on the front line.  This is also not the engagement of targets of opportunity in a ‘free fire zone’ a la Vietnam.
There are two problems for NATO in this context.  The vast majority of NATO aircraft are not at all suited for that kind of missions: they are too fast, not survivable enough, and often they lack the proper gear to detect and discriminate between targets. 
The second problem for NATO is that the pro-Gaddafi forces have man portable air defense systems (like the US ‘Stingers’), some of them very effective (like the Russian SA-24 which somebody provided the Libyans with).  The presence of these (undetectable) missiles forces US and NATO to mostly fly at higher than ideal altitudes.

There are a number of options available to the US/NATO forces overcome these difficult circumstances.  They all consist of the same basic solution: to bomb from high with some kind of means to direct these strikes from other resources.

Forget about satellites.  They are too costly to operate and come with a large number of operational restrictions.  Specialized aircraft (AWACS or JSTARS) can help, but are not really suited for providing close air support for small units engaging each other from a close distance.  It’s one thing to strike an armored regiment on the move and quite another to find a specific Toyota with a 23mm gun welded on top of it.
Forget slow speed aircraft with ‘forward air controllers’ (FACs) on board.  They can too easily be shot down by anti-aircraft guns or missiles.  And if they get shot down, then the pilots might need to be extracted, which add another *huge* ‘layer’ to the already complex mission.
Drones are very good at that kind of stuff, but most of them lack the range to be used over the huge Libyan territory.  Unless, of course, they are launched from the ground but that means “boots on the ground” launching and operating them.
The best option, of course, are FACs near the front line..  But that also means ‘boots on the ground’, doesn’t it?
Bottom line: no matter how you look at it, boots on the ground are absolutely essential to provide good close air support to the anti-Gaddafi forces.  They can be with the fighting forces, they can operate drones, they can direct airstrikes from special observation posts, but they absolutely must be on the ground.  A corollary to this is that if you do not have FACs on the ground, the efficiency of the US/NATO airstrikes will decrease dramatically and all sorts of mistakes will happen (strikes on civilians, “blue on blue” or “friendly fire” situations, etc.).
Needless to say, FACs must either be capable of protecting themselves, or they must be protected.  That means even more ‘boots on the ground’.
My best guess is that, typically, the US and NATO came up with yet another ‘half-backed’ ‘solution’: a few FACs on the ground combined with a mostly ineffective and error-prone engagement strategy.  This strategy is not sustainable, at least not for an Empire which fancies itself as the ‘only superpower on the planet’.  So the options are either to blame the rebels and withdraw, or put more and more boots on the ground.
Here again, I can only think of the wars in Bosnia and Kosovo.  In both cases the US Empire ended up using local forces (Croats, Bosnian-Muslims and the KLA) as a ground force to which NATO and the USA provided close air support.  But we need to remember here that in the Serbian Krajinas and in Bosnia, the Serbs were previously disarmed by UNPROFOR and only then massively attacked by the USA, NATO and local forces.  This will not happen in Libya.
So the US Empire has the option to do what it did in Kosovo and Lebanon (in 2006): direct its attacks at the “bad” civilian population and infrastructure in order to obtain a surrender.  Except that in the case of Kosovo, the US Empire could count on Milosevic betraying the Kosovo-Serbs (just like he had betrayed the Krajina-Serbs and Bosnian-Serbs right before). Gaddafi is unlikely to fold the same way.
Frankly, considering all that, I believe that the least bad option for the Empire would be to launch a limited invasion of Libya, probably by NATO forces only.   That would allow for as many FACs on the front lines as needed, and it would provide the rebels with much needed military assistance.  The political consequences of such a move, however,  would be another tsunami of anti-US and anti-NATO feelings all over the world.
Yet again, any tactical victory for the Empire will come at the costs of yet another strategic defeat.