For Want of a Nail gives a good lesson in both the development of artificial intelligence, and in single points of failure. Cordelia is the ship's AI, a beloved figure because she does all kinds of handy things for the ship. But an accident exposes the fact that she's been covering for her last "wrangler", who should have been "recycled". It's well told with sympathetic characters. A strong Hugo contender. Though I don't quite get the title, it is quoted in the story but still doesn't quite fit.
Kowal has a novel nominated as well, which I hope to read once I make my way up the library queue.