Sanford Levinson, over at Balkinization, argues that Alito was chosen not just because he wants to overturn Roe v. Wade and because he favors a less expansive definition of the Establishment Clause, but because he supports almost plenary power for the President in his guise as Commander-in-Chief.
Of course I wasn't privy to the discussions among the President and his advisors, so I can't comment on why Alito was nominated. What I can say is that I disagree with Levinson's assertion that the Bush administration is attempting to stack the Court so it can acquire absolute power. What Bush and Cheney favor is not unlimited power, but a return the days before executive power was curtailed.
The President clearly has powers by virtue of being Commander-in-Chief. How those powers interact with Congress' ability to regulate war and with the Bill of Rights is an important question. But the President is not arguing for unlimited power; he merely wants to resuscitate executive power. Where the President's actions do not clearly violate the Constitution (as in the case of the wiretaps) or a Congressional statute (less clear in wiretaps), it would make sense for the courts to allow him to exercise his power. I don't see this as a power-grab, but as a necessary element of fighting the war on terror.