3. Use a weighted system mentioned by someone else here based on an average of the past 2-3 years. Picks are based on the worst combined record. That actually seems like a decent idea. Prevents a good team with a 1-time dip from getting a top pick (hello SA grabbing Duncan). That system would hopefully put an end to perenial losers and put a premium on GM skills to keep a team at a high-level without having to stink for several years to get a good pick.
At first I liked the idea of the weighted system, but there are negative effects too. The weighted system would make it take much longer for some teams to rebuild.
'99 Bulls had 13 wins (in a 50 game season) and the third worst record in the league. Truly a pitiful team, definitelty deserving of consideration for one of the top picks in the draft. But all the previous years their record was great (62, 69, and 72 wins), wouldn't the weigthed system theoretically make rebuilding take even longer for them, till they were far enough removed from the Jordan teams? They were rebuilding for 6 years as it was, but the weighted draft could make things even worse. Even knowing how bad it was after Bird, Parish, McHale, and Lewis left, think how much worse it would have been had there been a weighted system inplace. Think how bad it could be after this current team is disassembled.