I disagree. If he did not nominate someone, the media would be stating, "He is too distracted by the indictment and the Rove allegations to effectively do his job...blah...blah...blah..." Remember, we are in a 24/7 news cycle and they are looking for something to talk about. If they cannot find anything, they will just make stuff up to talk about. Reporters will pester Bush on a daily basis on why he hasn't filled the vacancy on the court.
He is still in hot water. I am guessing that Fitzgerald is waiting for the next grand jury session in order to continue his work looking into Rove.
Rove is not benefiting at all. The Dems (namely Ried) have been pressing Bush to fire Rove, even though no indictments were brought against him and he has not been found guilty of anything in a court of law. It looks like more of the "guilty until proven innocent" stuff from Ried.