They'd be dumb as hell not to trade him.
KG can and will opt for free agency after 2007-2008. What would be the point in keeping him for a year when you're not even close to contention, anyways? May as well get something for him now, albeit someone as good as Amare or Shawn Marion, or a truckload of young talent from a team like Boston in Gerald Green, Al Jefferson, etc.
Salary wise, sure. And if you can back McHale up into a corner, then sure. However, I don't like that deal one bit for Minnesota. They are really, really for the future right now. They're better off getting three pieces from a team like Boston like I mentioned with Jefferson/Green/#5 unless they are going to get a guy like Amare, or a package of young talent from Chicago.
I mean.....
-Randy Foye
-Al Jefferson
-Gerald Green
-Rashad McCants
-#5 & #7 overall
That isn't a bad rebuilding block at all. I'd go for either two of Brewer/Conley/Hawes. Latest says that Hawes has been guaranteed #7 overall, anyways.