I hope New York uses Grant Hill as a sixth man instead of a starting two. I think they'd be doing both G.Hill and L.Fields a disservice if they took that starting two guard gig away from Fields.
Landry Fields is more effective the more he gets to play at the two instead of the three. Defensively, he is far superior there and actually a bit below average at SF. Also, the relative value of his rebounding is a lot higher at SG.
Meanwhile, Hill's lack of shooting range becomes more of an issue at the two than the three. Plus he has defend quicker, smaller and more skilled perimeter (SGs much better shooters than SFs) at the two. The more they can slot him in at SF, the better.
Grant Hill will give New York great multi-position flexibility off the bench. They can use him as a three while Melo is resting. Use him as a three with Melo shifting over to the four. Go big 2 through four with Fields, Hill, Melo. Or go small in the backcourt with Billups and Douglas with Hill and Melo at forwards. Or go big across the perimeter with Billups, Hill and Melo. They could even use Hill at PF in small doses.
New York would have no problems finding 28-30 minutes a night for Grant Hill off the bench.