Gadaffi's son is talking a ceasefire now and they're no longer going to invade Bengahzi, so the no-fly has worked, despite not (yet) being enforced.
The UN Agreement states that there will be no occupation of the country and Arab League is involved in the whole process, so it doesn't make sense to claim Libya is going to become a "US puppet". In fact it's kind of the opposite. The US would have preferred Gadaffi to be in power and the status quo to remain as it was. This whole process just increases the uncertainty across the Arab world, with no clear indication what sort of Govt will take control in Egypt and Libya.
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