Well, here's a handy-dandy primer, courtesy of Juan Cole.
The NYT reported that US Secretary of State Condi Rice tried to fix Musharraf's subsequent dwindling legitimacy by arranging for Benazir to return to Pakistan to run for prime minister, with Musharraf agreeing to resign from the military and become a civilian president. When the supreme court seemed likely to interfere with his remaining president, he arrested the justices, dismissed them, and replaced them with more pliant jurists. This move threatened to scuttle the Rice Plan, since Benazir now faced the prospect of serving a dictator as his grand vizier, rather than being a proper prime minister.
With Benazir's assassination, the Rice Plan is in tatters and Bush administration policy toward Pakistan and Afghanistan is tottering
This is pretty much a disaster for both Bush and Musharraf. And probably for everyone else.
The last thing Musharraf wants is for Bhutto to be a martyr.
And Bhutto was touted by the Bush administration as the one who would deliver democracy, despite the fact that she didn't have popular support. The saviour. That now looks like a really bad move, and another foreign policy blunder.