Is this a good thing? To be honest, I can't decide. Here are my thoughts ...
The arguments for this--to prevent a vacancy in the chief seat, and to avoid a tough fight--do not strike me as very good reasons.
The vacancy, if anything, is a good thing: any decision that founders on a 4-4 split gets punted till the new justice arrives. That the senior justice, John Paul Stevens, gets to be boss for awhile, I don't see as a big deal. I fail to see how it tips anything much, long-term, and the one, slight benefit might be that the passing of his brief "moment in the sun" might hasten his departure.
Meanwhile, a vacancy puts pressure on obstructionists; and the brief Stevens ascendancy can only help mobilize the Right.
Which leads me to the other argument: Bush doesn't want an ugly fight right now, in his weakened state. But that's an argument for why he would need such a fight!
Such a fight would be on familiar ground, over which he has more control, in which he can mobilize allies.
Of course, one consideration is that he might not want to "change the subject" any more than he has: ugly images from the Gulf Coast will continue, but I think the worst is over, and more good news is in the offing.
The apparent success of the constitutional debates in Iraq, with a referendum coming, seem to indicate more good news coming there. As far as the gas problem, I think most grasp that the hurricane itself was not Bush's fault! And, the high prices only bolster his argument for more exploration and refineries. The time is ripe for an offensive there.
As the SCOTUS blog points out, the question of appointing a "moderate" to replace O'Connor is now reopened. So we have that skirmish all over again; where it would have been harder to argue that Bush is obligated to pick a "moderate" to replace Rehnquist. Probably not a big deal, but I'm not sure how much that helps.
Could the White House want to add to the pressure on O'Connor to leave anyway? The longer the fight promises to go on, the more likely she just packs up and goes. And that would be good: an actual vacancy increases, somewhat, the urgency; and her empty seat can certainly do no harm, which is more than I can say for her.
Another consideration. Bush today Bush forewent the "bold stroke" of a first anything but a white male as chief justice.
If he were to name someone like Janice Brown, Edith Jones, Emilio Garza or Alberto Gonzales, to the court, putting them in at the top would seem most advantageous. Insofar as such considerations play a role (and they do), that would seem to hurt Jones' chances the most, since she'd be just another white woman. Since Brown would be about the gutsiest choice, that might advantage an Hispanic choice.
Finally, while I think a good political fight would be to Bush's advantage, it may be this move indicates Bush doesn't foresee the White House being able to handle such a fight--it may be overtaxed.
If that's true, that would suggest Bush is looking for another "safe" choice; maybe OK if he scores another Roberts (assuming Roberts ends up being a good guy--we don't know). On the other hand, sometimes bland, inoffensive nominees are bland and inoffensive for good reason (Souter, Kennedy).
Update: It occurs to me I neglected one, salient reason Bush did what he did: Roberts was/is his first choice for Chief Justice, and this is his opportunity to have him. Sometimes I am too cynical for my own good.