Trade: Kenny Anderson for Vin Baker. Or Chauncey Billups for Kenny Anderson. There's probably worse trades, but those are the first that pop into my head.
Worst free agent signing: I'll go with Dominique. When the Bird/McHale/Parish era ended, it should have been time to rebuild, starting with 1 or 2 really horrible years with high draft picks (there were some very good drafts in the early 90s, btw). Instead, the Cs decided to keep adding just enough quality players to ensure they finished somewhere in the middle of the pack every year, so that they never had a shot at the title, nor at the top draft picks, and instead kept drafting players like Acie Earl. The question Wallace or Volk or whoever was in charge at the time should have asked about Dominique was: Is this going to help us win a championship at some point in time? The answer to that would have been an unequivocal "No." That's the only question that should matter to a GM. Instead, it seemed like the point was to bring in a guy with name recognition in order to sell tickets in the upcoming season. Horrible, horrible free agent signing.