Well, when we traded for him he was viewed somewhat as damaged goods. That's why someone like Redd sticks out to me; another very good player, but someone who's clearly overpaid for what they do (he's a perfect #3 guy, but not someone who you really want to build around as your main player). The Bucks seem like a team that would be interested in saving some $$ (even if they aren't in the running for any of the 2010 free agents), and the deal works straight-up. Maybe a pick going back to them.
My preference at this point is to keep Ray around and have him sign an extension. He won't be at the minimum; with two more years on his legs, seems like he'd command a couple years at the full MLE, maybe a bit more. I could see a 2 year/$15M extension for Ray. But, it all depends on how gracefully his game ages, if he does prove to be a Reggie Miller type (my expectation) or if he loses his legs and therefore his jump shot.
EDIT: Just to be clear, I'm not proposing a Ray-for-Redd deal, but that's something that seems like it MIGHT make sense in eighteen months. Redd will still be in his prime, Ray'll be coming off of his, and I can see Redd fitting into Ray's role on the team pretty easily. Today - this season - I'll stick with Ray Allen, but he can't play forever.