Today's Washington Post explains how pivotal the battle over Sanda Day O'Connor's replacement will be.
This is why the compromise over the nuclear option was such a good idea. The Dems still have the filibuster if Bush attempts to ram through a heavily ideological candidate.
Now, any attempt to do so will risk a knock down, drag out political fight, which will put him in the position of either damaging his mainstream popularity or alienating his base, either of which will put his agenda at risk. At the very least, it'll sap the political capital that's supposed to be dedicated to things like maintaining his mysterious Iraq schedule and pushing through social security reform. Hopefully, these pressures will force him to nominate someone moderate so as to salvage both his agenda and the highly important midterm elections that are coming up.
Here's an excellent blog covering the nomination process. Required reading if you care about the judiciary.