Word flying around national news media, via unnamed sources, is that two things are about to happen. One is that, at 10:30 Saturday morning, at a press conference (which we do know has been called), Idaho Senator Larry Craig will resign. The other is that, sometime later but in the near future, Governor C.L. "Butch" Otter will appoint Lieutenant Governor Jim Risch to the job.
Both may be right; not having heard from sources claiming to know, we can only speculate based on external criteria. Those external criteria indicate that (1) odds favor a Craig resignation (support among his normal alliances and networks having collapsed), and (2) a Risch appointment is a completely credible scenario, but not yet to any absolute point.
Speculation, at the national level anyway, has centered on Risch, and understandably. (Stopping right here and noting that the governor's office explicitly says that no decision has been made.) He's the one substantial Republican other than Craig (and we're excluding from that candidate Rex Rammell, who would be running a splinter campaign) who has specifically expressed interest in running for the Senate in 2008, saying he likely would run for it if Craig did not. Risch has twice won statewide elective office (on top of a state Senate career spanning nearly 30 years) and last year won widespread applause for his seven-month run as governor of the state. (This site was among those extending kudos.)
His experience would allow him to jump in quickly. He hasn't walked the congressional corridors, but short of having served there, he'd be solidly prepared. There would be few political problems. If Risch were running for the Senate as an incumbent next year, he likely would be hard to beat, either in the primary (and he'd probably clear the field of major challengers) or the general. (Democrats may not want to hear it, but they should remember that Risch has beaten Democrat Larry LaRocco twice in years past.)
There's a little more: A Risch appointment would allow Otter to appoint a new lieutenant governor, maybe one closer to him. (State Senator Brad Little comes to mind as a prospect.)
(An online poll on the Spokesman-Review Huckleberries blog has Risch winning the vote on predicting who the next senator will be: Risch 47, Otter himself 14, Interior Secretary Dirk Kempthorne 8, Representative Mike Simpson 6, Bill Sali 3.)
So a Risch appointment would come as no surprise. But there are counter-arguments. He and Risch aren't especially close; Risch almost ran against him for governor last year. (They appear to have worked together capably enough, though.) He's not the only possibility.
Otter in fact can appoint anyone, almost, he wants to. His only specific limitation is to an Idaho resident who meets the legal qualification (constitutional) for the job; and there's a sort of political/ethical mandate that he appoint a Republican, as he surely will. So what other options would Otter have?