Unlike Harriet Miers, Sara Taylor didn't refuse to appear and testify at all. Instead, she appeared and testified as to some matters, but declined to testify on others on the basis of the Executive Privilege claim asserted by the White House. In doing so, I think she may have significantly damaged the basis for the Executive Privilege claim being made by the White House.
I apologize for not having the ability to include much in the way of legal research in this diary, as I'm currently sitting in a hotel room in Anchorage, AK on the last full day of my vacation. I hope some of the comments will flesh out the legal issues involved. But from the description of her testimony in this article, it seems clear that the kind of Executive Privilege being claimed by the White House here is at the outer fringes of the applicability of the doctrine.
Basically, Executive Privilege has been argued to be applicable in two types of situations. The first is where the inquiry is into what private advice an executive branch official provided to the President. This has generally been held to be protected, since compelling such testimony would interfere with the President's ability to get candid advice from his aides on matters of government policy if they knew that their advice would later be subjected to the glare of publicity upon compelled testimony.
The second type of Executive Privilege claim has been where the privilege is claimed to protect discussions about policy matters among other government officials. This is very comparable to the "deliberative process" exception to the disclosure of records under the Freedom of Information Act. The FOIA exception, by its terms (it is included in the FOIA statute itself), applies only to requests under FOIA itself -- requests which can be made by anyone, for any purpose, without any showing of need, and which can be prompted by nothing more than idle curiosity.
Courts have also recognized a judicially-created deliberative process privilege, especially where the communications involve officials on the White House staff. See In re Sealed Case, 116 F.3d 550 (D.C. Cir. 1997). Even the privilege concerning communications directly with the President aren't absolutely privileged where questions of wrongdoing are involved, at least with respect to subpoenas issued in connection with grand jury investigations. And this broader category of executive privilege, being less directly focused on the President himself, would appear to be even more limited, especially where it involves investigations into possible wrongdoing by White House officials.
In her limited testimony, at least as reported in the AP article, Sara Taylor makes it clear that she has no information that Bush was involved in the discussions about the U.S Attorney firings:
"I did not speak to the president about removing U.S. attorneys," Taylor said under stern questioning by Senate Judiciary Committee Chairman Patrick Leahy. "I did not attend any meetings with the president where that matter was discussed."
When asked more broadly whether the president was involved in any way in the firings, Taylor said, "I don't have any knowledge that he was."
In trying to distance Bush from the decisions involved in this case, Taylor apparently thought she was being loyal to him, but she may ironically have made it less likely that the courts will uphold the Bush administration's sweeping executive privilege claim when they are called upon to review it.