I have very mixed emotions about this rumor. I think the logical choice is to make the trade, but for no more than Marion/Jackson/highest #1. We keep Diaw, Barbosa and Jones.
The reason I'm mixed on this is that Marion is truly a perfect complementary player to our scheme and he is having a year that is slightly better than the year Garnett is having. My question is how will Marion be when Amare is back? Will he still average 22/12? I suspect his rebs will stay the same, but his points will go down because he has 3-4 less shots per game. Now he's at 18-19ppg.
On the other hand, KG is only averaging 22ppg even though he is the one and only option. Coming here as #3, would his production fall off? Probably. However, we'd have 3 great passers (Nash, Diaw, KG) on the court with a shooter (Bell) and our main horse (Stoudemire). Problem is that we have nobody left to be as active as Marion is off the ball, so our style would adjust to more of a hybrid halfcourt set. KG is a superior defender, though, man-up 1-5.
In short, our offense adjust down slightly and out defense adjusts up slightly. Team ppg differential would probably stay the same, but I think that if we had KG all year, we'd be 3-4 games better than we are now. The trade would be worth it....