No, he's replacing O'Connor, who is still on the court.
You are wrong.
Roberts was named to replace O'Connor.
Rehnquist died.
A second opening then occurred and Alito will be replacing Rehnquist. Roberts was elevated to Chief Justice and O'Connor agreed to stay on a bit longer is immaterial.
From a conservative's angle, Alito is replacing Rehnquist (2nd nominee, 2nd opening) and Roberts replaced O'Connor (1st nominee, 1st opening).
From a RAT's point of view and the MSM, ALito is replacing O'Connor since it makes the RATs' fight carry a bigger punch.