I keep reading that we can get rid of a player in the last year of his contract and recieve these magical benefits

It all depends. A long-for-expiring trade benefits a team with a 3-5 year business plan and a rebuilding strategy. In contrast, an expiring-for-long trade benefits a team with a short-term strategy of getting the best player(s) ASAP.

The Knicks should probably re-think this "win now" strategy because their trades don't always get them the best player(s). I don't see Shaq or Kobe in a Knicks uniform, do you?

The last time we exercised better judgment, we were on the other side of the table. We dumped Charles Smith's long-term contract for the expiring deals of the Spurs' Willie Anderson and I-forgot-his-name-power-forward. (And we still went to the playoffs). In the off-season, we used the cap space to sign Allan Houston, Chris Childs and traded for LJ.

The Knicks should probably re-think this "win now" strategy because their trades don't always get them the best player(s).

Actually, the Knicks had a "win-now" strategy under Layden (and a bad one by the way). That's why they traded a lottery pick for McDyess; used the MLE on a 40 year old center, etc. If you look at how many talented young players the Knicks have, it's clear Isiah's strategy is "win now and later"