Obama inherited a real mess in the torture situation. Yesterday's appointment of a prosecutor to go after low-level operatives who violated Bush administration policies, while pretty much forced by the evidence, is no solution; the polities themselves, first abandoned by Bush and now repudiated by Obama, were at least borderline illegal. And that's a very generous "at least."
Yet I don't think Obama is wrong to want to avoid a full-out prosecution of...well, who? Yoo? Ashcroft? Cheney? Bush? I think GOP complaints about banana republics are mostly nonsense, but that doesn't mean that the new administration wants to put its energy, and the nation's energy, into that sort of thing. Most importantly, the results of an adversarial process would almost certainly lead to a hardening of positions on the underlying issue, which serves no one's interests. For those who really believe torture is wrong, the real goal here should be for both parties to repudiate it, not for it to become the official position of the Republican party.
I think the real solution here is for Obama to pardon the torturers, starting with George W. Bush. Obama should do it magnanimously. He should say (whether he believes it or not) that Bush, Cheney, and the rest did what they did for the best reasons. He can't accept a "torture worked" argument (whether it's true or not; I agree with those who say it isn't true). But he can accept an argument that patriotic government officials did what they thought was best under tremendous pressure. He can say, even if it isn't true, that they intended to stay on the right side of the law and that they shouldn't be legally punished if things went awry. And then, yes, we need a proper commission to report on exactly what happened.
I may be nuts, but I believe there's a chance that Bush might be willing to "accept" the pardon. Bush may want to get some separation from Cheney (who obviously would reject the pardon). Bush's father and the Secretary of State's husband might be able to negotiate something; we hear they're close buddies, although who knows how much influence George H.W. has on his son. And while I doubt Bush cares a whole lot about his Washington reputation right now, he would certainly improve it, and that might appeal to him. As far opponents of torture, the symbolic importance of it would be very helpful. Bush wouldn't have to admit anything but that in his zealous defense of the nation some bad things happened, even if he didn't intend for them to happen. I think it would be a worthwhile trade-off if Obama endorsed that view in return for Bush accepting that what happened was, in fact, terrible (I'd probably insist he admits that it was torture). And Bush would have to cooperate with the commission, and urge everyone else to cooperate.
But even if Bush didn't accept the pardon, I'd recommend that Obama do it anyway, and I'd extend it to everyone below Bush without worrying about whether they symbolically accept it or not. Pardon/commission will get the facts on the table much quicker than investigation/prosecution, and only pardon/commission has any real hope of sucking the partisan spirit out of the issue.