It's rumored that Larry Hughes will sign with the Cavs for 12 mill per.

If they do sign him it would signal that they've put aside their eternal search for a 3point shooter for at least a moment. I like him as much as Redd but I think his D might be overrated. He was first team All-NBA on D in large part because he gets a ton of steals, but that means he gambles a lot and says nothing about his man to man D.
On the other hand, I think giving Redd a max deal is a mistake by the Bucks and would have been only a smaller mistake if he had been maxed out to play with LeBron: I like him in the 8-10 million range but not the max. Especially for a small market team like the Bucks. He looks to me like a slightly more athletic Allan Houston in that his D is suspect and he doesn't really "make others better". But with Redd, a healthy Ford, D-Mason, and if Bogut become at least a Vlade type they look pretty good in a couple years.
Back to Hughes. I guess he becomes a poor (I mean poverty stricken) man's Pippen to LeBron's Jordan. With Hughes' and LeBron's considerable ability to distribute the ball you can get more of a shooter/defender at the point. Add Gooden, ?Z?, and some good role players (love Anderson Varejao and Ira Newble, and maybe Luke Jackson's improves or maybe Martynus Andriuskevicius is the next Z) and they could be a solid playoff team until LeBron and a strong supporting cast are ready to take them all the way.

Should they resign Z?????

In my opinion it all depends on how much and for how long you don't want him eating the cap after he's no longer useful.