Yon's writing in his first surge dispatch is somewhat more florid than I've become accustomed to from him. It is full of hope and written without flinching. I rate it a "must read" for those who wish to actually follow this battle with fact based reporting.
Petraeus has bet the ranch on this offensive and may well take the pot. AQ's retreat from Anbar to Diyala cuts off their line of retreat to Saudia Arabia and Syria. Getting to Iran from Diyala by going east isn't easy at all and I'm positive that the Kurds would make retreat north less inviting than dying in place.
This is a decent map of the area.
Yon doesn't mention the Shia militias but I won't be surprised to read of extensive action against them in conjunction with the drive on Baquba. They have to have their wings clipped in order for Iraq to have a chance at remaining a single sovereign state.
UPDATE: Bill Roggio has additional detail plus quite a bit of detail in comments.