Orin Kerr of the conservative Volokh Conspiracy weighs in on the legality of the Presidential wiretapping. The result: probably doesn't violate the Constitution, but probably does violate statutory protections.
I'll just add he's being generous to Bush on the constitutional issue. One defense relies on a border search of "international email." My question is, what's an international email? Either all email is if you follow the electrons as they get scattered around the internet (doubtful legal argument), or you have to know that the sender or the recipient was out of the country when it was sent or read, which seems hard to establish.
More news on the subject at Talkingpointsmemo.
UPDATE: Because the path here leads to straight to the top, don't expect any Dept. of Justice investigation, let alone a Special Prosecutor. The way Dems should handle this is to demand a Special Prosecutor, or they'll bring impeachment proceedings.