President Obama will nominate Judd Gregg for Commerce; there is no word on who N.H. Gov. John Lynch will name as replacement, though apparently there is an "understanding" that it will be a Republican who will agree not to run for the seat in 2010, thus giving Democrats an excellent chance to pick up the seat in the mid-terms.
UPDATE: And this is why I hardly read Politico. According to David Rogers, this pick is "draining the Senate of the very talent [President Obama] needs to achieve this goal", citing the pick of Ken Salazar as well for Interior. So picking Gregg is a loss for Obama because the Senate is losing moderate Republicans, a fact attributable to the right-wing shift of the GOP, not anything Obama has done and even though Gregg will certainly be replaced by a moderate Republican. And Ken Salazar got thrown in as well because he is the "eyes and ears" of the Democratic caucus and valuable to Reid, even though his replacement is a capable Democrat. If anything, the failure to replace Gregg with a Democrat would make things harder for Obama, but I guess that's a too obvious conclusion.