It's all talk at this point so I encourage Obama to make a nomination & make it real.
Hell- make it a true blue liberal to pin Repubs to their position where Dems can beat the crap out of them between now & the election. It'd rev up the base rather nicely.
That would be incredibly dumb. If Obama picks a moderate he will be following the "Schumer/Biden/Obama Rule" by recognizing the fact that the senate and president are at ideological odds.
Picking a "true blue liberal" would be a non-starter. It plays into the rhetoric the republicans are hoping for and when they don't vote it would energize the base.
Obama will nominate a moderate, likely one that has gained broad Republican support in the past. If McConnell and company stick to their guns against a moderate it will paint them as partisan hacks and independents will rip into any senator in a close state. If McConnell and company cave in to a moderate it might work out ok for them (the base will view it as good politics, look at this board for examples) independents might just look the other way.
What the Reps are claiming they will do has no precedence. If they actually follow through and pay no political price it will change the political landscape for generations. In such a case I don't personally believe our political system can be seen as functioning any more.