The Phillies have decided to bring back Jose Contreras for 2 years at $2.75 million per season. This seems fine with me. Contreras is getting older (he says he's 39... he could be 48), but was great this year. In particular, he had tremendous movement on his splitter throughout the season and into the playoffs. Also, I don't think much better options exist on the market at a lower price. Ideally, he will pair with a rejuvenated Danys Baez (who is signed through 2011 and probably untradable at the moment) to form a nice 6th-7th inning combo. This, combined with a young arm --- Scott Mathieson, Antonio Bastardo and/or Vance Worley --, a new LOOGY (I like Taylor Tankersley or Pedro Feliciano, personally), and Madson/Lidge at the back-end form a solid bullpen.
Regarding one of these points, GM Ruben Amaro recently said that acquiring a lefty reliever is not a priority. He's either lying or crazy (probably the former). The Phils have no established lefty relievers on their roster. Bastardo has talent, but clearly we'll need a bit more depth. I fully expect the position to be addressed by March.