Let's see - the Knicks take back two of the best players in the deal and only trade away role players. They still will have cap space in 2012 (not max space, but certainly enough to make a splash) and this deal was bad, how? The Knicks were not going to win a championship with this current core. They just added a top-10 player without giving up too much in terms of draft picks (1 mid-round first and 2 2nd rounders?). Both the Nuggets and Knicks did really well here.
Billups is worlds better than Felton - has anyone seen his production over the last month? It's not a championship team right now, but they certainly are much closer to it. This also makes NY a much more attractive FA destination for the buy-out types.
NY got the best player in the deal.
I think its debatable whether they got the two best players. If I was a team contending for a champtionship, I'd want Billups. Otherwise, I'd want Gallinari or Chandler.
I think NY gave up too much to get the best player. I also don't think Melo is a great as many others seem to think.
You raise a good point, though, that having Amare and Melo does help the Knicks to attract FAs. But its not clear that they will have salary cap space to sign a top FA. Certainly at the margin, it means they'll be able to sign better FAs with the MLE (of course, all this comes with the caveat that we'll see what happens with the CBA).