Lee is currently overrated in New York and around the league because he's the best player on the Knicks (which is not saying much) and because current circumstances are ideal for him to excel and put up good stats.
The Knicks have no rebounding and little inside scoring since the Randolph trade. Combine that with the faster pace the Knicks are playing at and you have a recipe for Lee putting up some very good rebounding numbers and better than his typical scoring average.
On a good team with a solid rebounding center, Lee would be more or less a 10 and 8 guy. Not that that's terrrible, but he's still just a very solid backup PF that can also fill in as a starter on a bad team or if there's an injury etc...
Look around the league. It's really not that hard to find a PF that can average 9-10 rebounds "per 36 minutes". It's also not that hard to find one that's a pretty efficient scorer around the basket. What's difficult to find is someone that can do those things plus block shots, play great defense, post up well, shoot well from the outside shot etc.... (some combination of those other things)
If Lee stays around for 2010 beyond, that would be fine. But right now his price is so high relative his real value, it probably makes some sense to try to trade him instead of signing him for 10 million or letting him walk. If we could get him for 6M-8M, that would be a different story.