First, the dets-- the deal is for 7 years at $126 million (which breaks down to about, and yes we had to break out a calculator for this, 18 million per year). It's the biggest contract for a pitcher in baseball in, like, ever and will make him the sixth highest ballplayer in baseball. Still to be left explained is how the Giants will swing this and also swing the other Barry who has still yet to be signed, probably because they're haggling over all the deferred money the Giants needed to use to sign Barry Z. Theoretically, the Giants were going to sign Barry B first and then see if they had anything leftover to sign Barry Z., but they went and jumped the gun.
Which brings us to caveat #1 in this deal-- is Zito worth the biggest contract for a pitcher ever? Zito is good (102 wins and 63 losses in 222 starts and a career 3.55 ERA) but maybe not that kind of money good. Which brings up the second question-- is it worth signing somebody to that much money and for that long? At $18 million, that's almost a 1/4 of the Giants annual budget (which is always around $80 million) to somebody who is definitely not the best pitcher in baseball and who only pitches every fifth day. The signing basically says that your new cornerstone of the Giants is Barry Zito. It’s also worth considering that seven years is a long time in baseball and pitchers are never the most durable. One torn rotator cuff and the Giants are pretty much screwed for the next few years.