Souter is planning to retire at the end of this term.
Which means we're in for months and months of maddening news cycles about who Obama will nominate, will the Senate Republicans block, "up or down" votes, etc etc etc.
UPDATE: Professor Orin Kerr has already provided the talking points for both sides:
The Supreme Court is losing a Republican nominee who has often been a swing vote. He has been a one-case-at-a-time jurist in the tradition of Justice Harlan. We need to be very careful about shifting the Court too far to the left, turning back the clock to the 1960s. Balance is essential, and Obama should nominate someone who was essentially a centrist like Justice Souter.
President Bush stocked the Supreme Court with extreme conservatives like John Roberts and Samuel Alito. The Supreme Court hasn't had a a real progressive in decades, and it is time to have just one to balance out the Four Hoursemen of Scalia, Thomas, Roberts and Alito. Besides, Justice Souter has been a reliable liberal vote, and another liberal vote won't actually change the outcome of any cases. Balance is essential, so Obama should nominate some who will balance out the court's conservatives.
I fully acknowledge that Souter's replacement is big news. Any change in the court's makeup is big news. But big news <> "media circus", which is what this will inevitably be.
Souter is comparatively young (he's 69) and in good health. So this comes somewhat as a surprise to many, although he's long made it known that he misses New Hampshire and doesn't like D.C.
Souter himself was appointed by Bush I to replace the very liberal Brennan. Bush was assured by John Sununu that Souter would be conservative; Souter quickly became a huge disappointment to the GOP. He is rightfully defined as one of the "liberals" on the bench.
Still, his replacement will be important. When 2016 rolls around, the makeup of the Supremes will be:
You've got 3 comparatively young conservative justices at the bottom of that list, so there's going to be a strong conservative influence on that bench for a couple of decades.
Furthormore, I doubt Stevens will last until 2016. Ginsberg is sure to leave as well. Both lean liberal.
So Obama may be appointing three justices. In the end, it probably won't change the make-up of the Supreme Court that much; it would more likely reserve that status quo. Still, elections do matter, because McCain would tip the scales of the court to the right.
This is a very bad development for the GOP; and quite a good one for the Democrats. Republicans had to hope this opportunity would come at a moment when Obama wasn't quite as popular as he is at this moment. The recent Spector defection doesn't help the GOP much, as Spector was always likely to approve a moderate-to-liberal nominee, but now he can do so without repercussions from his party.
So now the game begins: who will/should replace Souter?
I, for one, always thought Hillary would be great for the job (and my God, she's been vetted enough). Actually, so would Bill.
But of the serious names being floated (already!), I'm partial to Sonia Sotomayor (I argued before her once), and Cass Sunstein. Diana Wood and current solicitor general Elena Kagen would be good choices as well.
Then again, a bomb-throwing, passionate, visionary, liberal Scalia would be cool, if Obama can find one.