As I predicted, the Supreme Court reversed the Second Circuit ruling with a 5-4 decision authored by Justice Kennedy.
Here is my prior analysis of the case: WWKD: Ricci v. DeStefano Will Likely Turn on Justice Kennedy.
The SCOTUS blog has a good analysis of the the judicial politics surrounding the ruling: What Ricci says about the Supreme Court’s views of Judge Sotomayor SCOTUSblog.
What The Decision Means Politically
It is difficult to disagree with the White House statement (and the SCOTUS analysis), which says that the opinion proves that Judge Sotomayor is not biased.
As I stated in my prior analysis, even with the 5-4 reversal, 12 judges have voted against the firefighters, while 11 voted for them. This definitely shows that the issue was unsettled and that Second Circuit ruling was within the mainstream of legal thought (on a highly divisive issue).
I suspect that her opponents, however, will not let it go. Despite the fact that 11 other judges, including 4 who sit on the Supreme Court, have ruled the same way, they will still make noise about the ruling proving that she is unqualified for the Supreme Court. Ultimately, their complaints will have no effect.