EGAD! O'Connor Retires
Here's how it's going to go down: Obviously Bush will use this opportunity to swing the court to the right, but he'll do it in one of two ways. He might appoint another woman or the court's first Hispanic (think Attorney General Alberto, "Torture is no big deal" Gonzales). If he does, and the Democrats so much as squeak in opposition in the Judiciary Committee, Republicans will bludgeon them into silence with charges of "bias". In fact, this scenario is so likely, that you can bet that Karl Rove and Senate leaders are already discussing it.
The other possibility is that he'll appoint a reactionary conservative, probably an "old white guy," who won't be inclined to move to the center, as justices often do once they're on the court. In this scenario, the Republican leadership in the Senate will bait Democrats into a filibuster that will then be used to demonstrate why the "the nuclear option" (doing away with judicial filibusters) must be exercised.
Either way, conservatives are going to win this one and further trash the Constitution. Because, let's face it, conservatives only dislike "activist" judges when those judges are not their judges. As Bush's appointment of Janice Rogers Brown suggests, a conservative willing to make law from the bench is a fine thing.