This is clearly a crony appointment. As much as I lamented Roberts' lack of experience, this really is like nominating Brownie to head FEMA. The question is why he did so. I believe it is because Bush expects indictments to be handed down in Treasongate (the outing of Plame) and suspects that Cheney and he may be involved as unindicted co-conspirators. He wants Miers on the Court to protect him while he is still in office. By having Miers at the Court, Bush and his cronies can avoid perjury traps, because any decision of a lower court involving a constitutional issue can be appealed upwards and Miers will protect Bush & co. from liability.
In addition to the outing of Plame, Bush faces risk for the Downing Street Memos, the abuse of prisioners in Iraq, Guantanamo and Afghanistan, and for Katrina/Rita fall out as people begin to sue the Federal government for malfeasance. In short, I believe Bush is appointing Miers to protect himself and his crony friends who have been beneficiaries of his policies. He also believes (correctly I think) that Senate Democrats would rather take a chance with Miers than a proven conservative, so confirmation is likely. The only way she doesn't get confirmed is if Republicans in Congress revolt after pressure from conservative interest groups. If Miers were defeated, then the next appointee would most likely be a hard right conservative with a track record that Republicans could get behind.