Panetta advised Obama on various transition hiring decisions, so he probably Cheney-d his way into this plum gig. He was a Captain in the Army, and he kept enforcing the Civil Rights and Voting Rights acts as Nixon's Civil Rights czar even though Nixon didn't really want him to, which is neat.
But usually the CIA is run by, you know, CIA people. Spooks and spies. There was speculation just this morning that Obama would just keep current director Mike Hayden in place, but the spies don't really respect him that much. Of course Panetta is not a spy at all—as far as we know!—so who knows what the agency will do with him. They will probably poison us all with mind-control drugs.
Panetta was on the Iraq Study Group and he is a Washington Insider from way back but Obama couldn't find anyone to promote from within the CIA who wasn't implicated in the various illegal things the CIA has been doing since 9/11 so maybe he will not be so bad, for a CIA director.