The issue here is simple politicking. As an incoming attorney general, it would be difficult, if not crippling to unequivocally state that water boarding is torture when Mukasey has no idea how much of it (likely lots) has been going on.
Why would anyone with a brain tie himself up in a knot like that when he does not know what is on the other side of Door #2? Setting character issues aside (we certainly should want an Attorney General who can stand up and say "this is wrong, morally and legally"), if he declared this torture to be "torture' the remainder of Mukasey's tenure would be spent staving off demands to prosecute and investigate, etc. Essentially, he would have to clean up a mess he didn't make, and would compromise his own resources. Do we want a dummy for AG?
If Congress truly wants an answer, aside from declaring it illegal (which arguably has been done already) the Senate could appoint an independent committee to investigate the matter, and prosecute accordingly.
This is an issue of practicality. The Democrats are simply grandstanding (as much of Congress seems to be these days - see, for example the Yahoo! hearings).
If permitting an Attorney General who believes in water boarding is so important as to prevent nomination for a period of 1+ a bit years, then why isn't a committee investigating the issue already? Enough with the show, Either approve him or don't; let's move on.