What I read is that after their initial list of candidates didn't pan out, they decided to look for a coach on the rise from the non-BCS conferences. They interviewed 3 guys, including the HC at Houston. Dooley was head & shoulders above the 2nd tier candidates, so they moved to get him in there pretty fast.
I'll be interested in seeing how he does at UTK, and whether the fans & boosters really get behind him. From my experience living down here, I've come to think of Tennessee fans as a cross between Mizzou & Buffs fans, so I don't see them being too classy in how they handle this situation. I also have a hard time pulling for them to be successful because of their demeanor. The fan base seems underwhelmed by, and in some cases, hostile to Dooley. The majority of fans that post at volnation.com seem to be taking this about as well as they took Kiffin's departure. It reminds me a bit of how Auburn fans reacted when Chizik was hired. While not the "home run" hire that they seem to have expected, I've read and heard a lot of good things about Dooley. I don't know that anyone can do much better than .500 at LaTech, so it's hard to judge him based only on his record there. He has a pretty impressive resume as an assistant coach, and is universally described as a very bright person. By all accounts, he was a phenomenal recruiter under Saban at LSU, and Saban still speaks highly of him to this day. He may not have been their first choice (or their 5th), but I think he'll be a fairly good fit at UTK - much better than Kiffin was, imo.
The biggest problem I see is that the UTK administration is forcing him to keep a number of the existing staff so that they don't have to pay off the multi-year contracts that Kiffin got for most of his staff, including about 6 members of that staff who remain at UTK. This is supposedly what kept Cutcliffe from taking the job. Placing limits on getting his own staff together seems to be hamstringing him before he can even hit the ground.