New York by a landslide. If they can clear that much cap space they can talk a pair of the top free agents to join their side, and build a team that will contend for a title in short fashion.
It's a decent trade for Houston if they have no plans to try and get far enough below the cap in 2010 to offer a max contract. It would be better for them though, if they could lose Jeffries' deal for a 2010 expiring one.