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Barack Obama's nominationofSonia Sotomayor is a good example of how Presidents make Supreme Court appointments: they balance political constituencies they wish to favor or reward and the predicted ease or difficulty of confirmation with their desire to have jurists who will cooperate with their policy initiatives.
Sotomayor will be the first Hispanic to serve on the Supreme Court if one does not count Benjamin Cardozo, a Sephardic Jew whose great-grandfather, Abraham Nunez Cardozo, emigrated to the United States from England. Her appointment is designed to please a two important constituencies for the Democratic party, Hispanics and women. Although the media debate has largely been about what the Court "needs" in terms of diversity and background experience (for example, the debate about "empathy"), a President is far more likely to be concerned with promoting his electoral interests and those of his party.
The fact that Sotomayor is both a woman and a Hispanic may help her win confirmation in the Senate, for Senators are just as aware of the politics of appointments as Obama is. Obama will likely need one or two Republicans to avoid any threat of a fillibuster; a candidate who appeals to important constituencies that Republicans also need will be harder to oppose and can help provide the 60th vote. Also helpful may be the fact that Sotomayor was first appointed to the bench by a Republican and is being positioned as a moderate or pragmatic liberal. In this respect, the careful positioning of Sotomayor as not the most liberal candidate Obama was considering helps to make her confirmation easier and also helps establish Obama's own image as a non-doctrinaire pragmatist. (This may explain why the names of seemingly more liberal candidates were regularly floated in the media.) Thus the choice of nominee also reflects back on the President who nominates. It is also worth noting that the pick was handled relatively efficiently and with a minimum of drama. The way that a nominee is chosen reflects back on a President's ability to manage important decisions.
Obama's pick of Sotomayor gives him a liberal replacement to David Souter who is likely to form part of the liberal coalition of Justices currently on the Court. Sotomayor has a fairly long track record as a judge. As a result, Obama knows pretty much what he is getting, which suggests that Sotomayor is unlikely to disappoint Obama repeatedly on the issues he cares about, at least while Obama is President.
When you put these factors together, Sotomayor seems like a perfectly sensible pick (assuming, as always, that no embarrassing details emerge in the confirmation hearings). There are other very suitable people Obama might have chosen instead, but he is likely to have other opportunities during his presidency. Therefore we should not understand his failure to pick someone like Diane Wood or Elena Kagan, for example, as reflecting any difficulties with these candidates. They may well end up on the Supreme Court, just as Steve Breyer eventually was selected by Bill Clinton after having been passed over the first time.