Bush's whole argument for doing this is entirely bogus. There is at least one other person serving out a similar term right now who was charged with the exact same thing as Libby. Clearly this was simply a political commutation, which is legal but distasteful.

From what I have heard today, I'm pretty sure that Libby had his sentence commuted and not pardoned because if he were pardoned, the charges would basically be set aside. If that happens, there is a really good argument that the fifth amendment would no longer apply to him, and he could be compelled to testify against Cheney.