The new "war czar" position appears to undercut the principle of civilian control of the military. The new position puts a military officer, who in theory reports through the chain of command to the Secretary of Defense, in a position to give orders both the DoD and to the State Department (according to ABC, he will have the power to direct the DoD, State, and other agencies). Apparently Bush has a new Mini-Me.
This principle is taken so seriously in the United States (or, at least, used to be) that the Defense Secretary cannot be a military man who has served in the last ten years.
This position is subject to Congressional confirmation. Congress should question not only the person nominated, but the very concept of the position. Harry Truman had the correct sign on his desk: "the buck stops here". Bush should not be handing much of the government over to a general.
UPDATE: Poindexter is not a precedent, see the flip.
Some have said in comments that John Poindexter is a precedent. But what they miss is that the head of the National Security Council has only an advisory role, coordinating input from the various departments. Unlike the "war czar" position, the NSC head does not give orders to any part of the Defense or State departments.