Quote from Newsday article:
The real significance here -- unless you're all torn up about Balkman being traded -- is the fact that the Knicks would have 17 players under contract. That's two over the limit and a clear sign that they're gearing up for one or more significant trades.

The Knicks are involved in active trade discussions with several teams, so this could be an eventful summer. The way Donnie Walsh is amassing bodies suggests that he's positioning himself to do something big when the opportunity presents itself.
I like Balkman, but if trading him helps us get someone better, then I'm all for it.