As far as Sandra Day O'Connor's retirement goes, along with the all-consuming question of "Who will replace her?," I'm afraid David Sirota has this exactly right. Some lunatic winger will get nominated -- maybe even Janice Rogers Brown -- the Democrats in the Senate will say, "Oh hell no" and launch a filibuster. So the battle will rage on for a while, Bush's "base" will get riled up and motivated to send in lots and lots of money, conservative judicial activists will blast their opponents with fairly superior firepower, and bobbing heads in the media will start carping on those "obstructionist" Democrats (bonus carping here if the nominee is a woman, minority, and/or Catholic). Finally Bush will give a very somber speech about withdrawing his nominee, announce that he's very disappointed in the Senate, toss in a few bonus 9/11 references, and nominate some slightly-less-lunatic ultraconservative instead. The new nominee gets treated as the "compromise" candidate, is lauded far and wide as a moderate, and finally gets confirmed after pressure on the Senate Dems to "act like grown-ups" by television pundits who can afford to get their abortions abroad and will have no problem with a Supreme Court hostile to labor and environmental protections.
One would hope not, of course, but is there anyone who finds this scenario wildly implausible?
UPDATE: Jeff Dubner disagrees, and offers a variation on the theme that also sounds quite realistic, this one involving the nuclear option.