I think this is a good move by Chicago.
Certainly they missed the boat on D'Antoni, their philosophies are quite different (D'Antoni advocates a fast-paced offense while Collins is a defensive guy) but they have similar experience.
One of the knocks on Collins is that most of his success was due to Collins finding himself in the right job at the right time. He took over the Bulls as Jordan was entering his 3rd season; Pippen was a rookie. In Detroit, he did some great things, but he had the privilidge of coaching guys like Joe Dumars and Grant Hill.
However, couldn't you make a similar arguement concerning D'Antoni's success? D'Antoni took over in '03 when the suns featured a roster of Marion, joe johnson, Amare, Marbury, Barbosa, Penny, and antonio mcdyss - that team finnished 24 games under .500. In his first full year, D'Antoni completely turned the Suns around, but added Nash, Quentin Richardson, and Jim Jackson to that team. Needless to say, the SUns have had a stacked lineup since his first full season.
Collins' failures in Washington are noted, but those teams were doomed from the get-go. In the '01-'02 season, Collins had an almost 40 year old Jordan as his leading scorer with a young Rip Hamilton carrying the load as well. Outside of that, the team was irrelevent. Popeye Jones lead the Wiz in rebounding while Chris Whitney lead them in assists. The following season was a dissapointment as well; however, had Jordan drafted Paul Gasol or Ty Chandler instead of Kwame the year before, COllins may still have been coaching the Wiz to this day. Further, Collins never had the luxery of coaching Gilbert Arenas.
The Bulls did not land the grand prize of the coaching world in D'Antoni, but they may have sacrificed some sizzle in order to get more steak with Collins. His rapport and influence on young stars is undeniable, which may be just what Chicago needs in order to fully develope guys like Noah, Thomas, Hienrich, and Rose (hopefully).