The one bright side for Democrats is that Kirk's numbers are high because he has strong support from the Republican base, while Democrats have yet to rally around Giannoulias.
The main reason Giannoulias is behind is that he's getting only 54% of the Democratic vote while Kirk is winning 77% of the Republican vote. It's not that a lot of Democrats are planning to cross over and vote for Kirk, but 36% of them are undecided right now compared to just 16% of Republicans.
Assuming Democrats start to come home as we approach November--as opposed to deciding to stay home--Giannoulias's numbers should improve.
Republicans currently have only 41 seats in the Senate, and comparatively few Democratically held seats are up in 2010. If Republicans hope to win back the Senate, they are going to need to practically sweep the board and win in some traditionally blue states, like Delaware, Illinois, and California.