The arrest of Larry Craig highlights the police powers of the state, that is the right to protect the health, safety, morals and welfare of the citizens.
For the bulk of American history this has been a function of the state and--primarily--local governments. It is something that many people approve of since it keep citizens in line with what the majority think is proper, but also controversial since majoritarian prejudices can enter into decisions regarding what police powers are focused upon. It can be the means by which unpopular groups can be kept out of the mainstream.
This is especially true for morality issues, particularly those that involve activity in public spaces. Which brings us to Senator Craig.
Apparently, due to a history of "activity" in a particular Minnesota airport restroom, police placed an undercover officer in the restroom as a lure to would be, let's say, partners. According to the police report (plus the audio), the Senator gave every indication that he was available, and was arrested. His guilty plea was intended to keep the story suppressed, which was obviously a poor decision.
Now he is waffling on a possible resignation, and the Republican Party is weighing its options.
This story has so many angles it's tough to pin them all down, but I'll try my best to link to the various stories that highlight them.
1--He just can't admit that he is gay.
2--Overturning a guilty plea is not easy to do.
3--He may be protected from arrest due to Article One, Section 6 of the Constitution.
4--How did the story go unnoticed for two months?
5--Don't cops have something better to do?
6--Republicans are hypocrites on moral values.
7--The police are out of control.
8--This is why "don't ask don't tell" does not work in the military.
And it goes on and on. Things got even better when the Senator left a voice mail message on what he thought was his lawyer's phone, telling him he was about to announce his "intention" to resign, and that he was to start to aggressively defend him through the media. A great example of how politics really works.