Definitely some things about this decision seems strange but obviously Manning spent lots of time going over it so he must feel comfortable.
Tennessee has rather mild winters, SF is more chilly/rainy and Denver can be frigid with snow.
SF has a dominant defense and great RB. Plus they just got Manningham and Moss.
Denver will probably trade Tebow now because that situation would be tough. Even with a great Hall of Fame QB such as Manning this scenario could easily happen --- Manning struggles in a couple games especially when first coming back. Tebow has such a strong and passionate fan base that it would be inevitable having them start calling for Manning to be benched. It could potentially become a huge distraction so Tebow will be moved most likely.
Great quote from Bill Simmons though on this decision ---
Any time you can dump a QB with mystical powers for a 35 year old guy coming off 4 neck surgeries, you have to do it.