I think they have had a good offseason. They have added pieces. They still have future cap flexibility.
The only downside (which is a major downside) is the 1st round pick issue for the next few years.
They have preserved cap space for next year, true. After this season, it's Amare, Felton (expiring), Turiaf (player option), and team options on Gallo, Douglas, Walker, and Randolph. So they could have enough cap space to land another max-contract FA, and another second-tier player.
If we use Amare's last team as a benchmark for success, however, the Knicks are a far cry from the Suns of D'Antoni's era. Felton is no Nash, and he's currently the Knicks second or third best player (Gallo?).
Knicks gave away last year's lottery pick, and picks in 2011 and 2012 to build around Stoudamire, Gallo, and next year's FA crop. Even if they land Melo, how far can that team really go?