I've been figuring that he floated her to buy some time while he was looking at other candidates. It's just my speculation, but he couldn't have been serious about her, I don't think.
That thought had crossed my mind... but he was in charge of the timing of the nomination, and Rehnquist died such a slow death that it seems improbable that they didn't have enough lead time. No, I'm afraid the Bush clan is more like the mafia than anybody here would be comfortable with, and this was paying back a debt owed to one of the "family".