I think it depends upon what type of contract Cassell signed.
The article indicates he signed a "guaranteed contract". If that's the Uniform Player Contract, which all players sign, he can't then shift that salary over to become a coach. Instead, the team would have to cut him, and negotiate a coach's salary with him. (Otherwise, it's circumventing the salary cap.)
No matter what, we can only have 15 players under contract. The team can't "activate" Cassell, as some have suggested. Instead, they'd have to sign him to a new contract, after waiving the first one.
Also, according to Larry Coon, the CBA prevents player-coaches, as this is seen as a means of circumventing the cap. I'm assuming this means players can't be *paid* as both a coach and player at the same time, as the coach's salary would allow teams to pay players pretty much whatever they wanted.