Article on why the Rockets need to get rid of Yao now: http://hoopsmanifesto.blogspot.com/2009/07/feets-dont-fail-me-now.html
If for some reason you get a dead link from this article, just go to the home page of the site and its on there also.
Buy him out. Normally you can get guys to accept a lesser amount than what is still owed on their contracts.
Yao is probably really profitable for the Rockets due to his massive following in China. I don't see this as a smart financial move.
I know financially it isn't the best idea so it probably won't happen, but in order for the team to move forward and actual improve they need to get out from underneath the Yao/McGrady shadow.