I see two ways of looking at the Petrie issue (as well as, of course, an infinite number of shades of grey in between).
1. He isn't doing a very good job,
or
2. He isn't making the most fundamental decisions, the Maloofs are messing things up.
Because, for us, management and the owners have to be viewed as an amorphous and mysterious blob, it doesn't matter very much which one is true. The combination of Maloofs + Petrie has not been good lately, and Petrie's managerial mojo is in decline in one way or the other.
By now our contracts are such a mess that only a manager who was supremely skilled and confident could fix things in less than 4 years. A guy who is willing to take big risks for big rewards, who is not hesitant to tell his employer when they are wrong, who has too much pride to collect a paycheck for being an ineffective yes man. The NBA is changing, and that's important, but the climate with the Maloofs seems to be changing even faster.
In short, I suspect that Petrie has the brains to pull this off, but lacks the 'nads. I don't think he's willing to tell the Maloofs to shut up and let him do his job.
If letting the Maloofs burn their own hands for the last few years has gotten the job done, then it's a maybe, his biggest obstacles will be those g-dawful contracts, and the fact that nobody wants to talk trades with him anymore. If the Maloofs haven't learned their lesson, then they will need to hire a GM who they will listen to and respect from the get-go. The Maloofs are just basketball amateurs who made an investment; they need to be constantly reminded of that.
We will get a better idea this summer, but for now, my money is on an immediate improvement from a new coach, followed by nothing more than gradual, incremental changes over 3-4 years. I don't forsee the Kings in the WCF between now and 2011, if then.