I really couldn't figure it out
It's confusing even to those who follow NJ politics.
Rumors about McGreevey's orientation have been following him for a long time, certainly since his run for governor versus Whitman a few years ago. There was some story about his first wife, who left him and fled back to Canada with a daughter and wouldn't talk about him at all, but IIRC she showed up when he was installed as governor, so it sounded like sour grapes.
The story being floated right now is that he tried to push his bodyguard for the role as NJ Homeland Security czar, which would be a great place from which to ladle out federal gravy. The bodyguard was a foreign national who couldn't get get a security clearance from the FBI, and apparently had no real qualifications, so after an outcry the man was shunted off into another state position, no pun intended, albeit a 6 figure one. Scuttlebutt is that McGreevey was about to be named in a same-sex harrasment suit, and it may be a result of this previous relationship. I suspect that's why the public revelation was wrapped up in the resignation, as a way to deflect charges later on. Just specualtion, of course.
As Ed notes, lately several of McGreevey's closest friends have been under investigation or indictments for a variety of acts relating to fundraising, etc., and in an attempt to use a prostitute to entrap someone. Some of the accused are 20 year plus personal friends of McG's, and had this been say NY with a greater media scrutiny he'd have been in the national news a lot sooner. The guy's approval ratings in NJ were abysmal, but as is normal in this state it wouldn't matter much when it came to running business as usual.
As to the timing, it was explained today that if he quits now, or before Nov 15 or so, NJ would have a special election and pick a new governor to serve out the balance of the term. NJ doesn't have a lieutenant governor to fill in, so if there's less than a year of a term left the state Senate president acts as governor. So this way it preserves the seat for the Democrats for now, and more particularly through the fall election: it's not impossible that an anti-McG backlash could turn this state for Bush, which would mess the Democrat national strategy up real good.
It's reminiscent of what happened when Torricelli withdrew from the Senate race, although there clearly Bobby T's bailout happened after the date when the ballot was fixed. The Supreme Court shrugged and put Lautenberg on the ballot any way.