Sandra Day O'Connor is retiring from the U.S. Supreme Court.
Harry Reid came out with a list of suitable candidates a few days ago (when we all thought Rehnquist was the Justice who would retire): Republican Senators Lindsey Graham of South Carolina, Mel Martinez of Florida, Mike DeWine of Ohio and Mike Crapo of Idaho. So those are obviously the most pallatable conservatives to Reid and would likely ensure an easy confirmation process.
How difficult does Dubya want to make this fight? His political capital is lower than at any other point since 9/11, the people are already fed up with Congress and unlikely to kindly look upon another filibuster fight. I'm not sure the Republicans in Congress even want a prolonged battle over judicial nominations right now.
To paraphrase the Oscar-shafted "I'm Gonna Git You Sucka", "there are two ways out of here...the window or the stairs." Let's see which one GWB takes.

Huge, huge, huge news!
Wow.
Brilliant!
Picking Republican Senators...although we can guarantee hardliners.
...and the beat goes on
Now I'm reading that Rehnquist is also retiring, so we could have all kinds of chaos coming very, very soon. I wouldn't doubt that he's retiring...I mean, I don't think he was even expected to live this long.
This is from an updated entry at Daily Kos:
Brilliant, indeed.
Yeah, you really have to give Harry Reid credit. The man's a thinker and a fighter. Must be his boxing background...
"But it does me no injury for my neighbor to say there are twenty gods or no God. It neither picks my pocket nor breaks my leg." -Thomas Jefferson