With this year's pick, I would definitely try to use it to dump salary.
For me, the 2 players for total salary x compared with one player at salary x also makes sense, depending on the situation. For example, I don't know that I would want to pay 2 players 3M each that are your 9th and tenth men that might average 15-18 total, if I can use the 6m total to get a better fit/better rounded player that is or 7th man that can give you 24 minutes or so per game. I would rather have better quality players at positions 1-8, or 1-9, even if it means that you only carry 13 players and positions 11 and 12 are minimum salary players. 10-11 players will get you through the season, unless you have a significant number of serious injuries. But, in the playoffs, you want a great 8 players, with #9 and #10 able to give you a few minutes here and there.
Right now, I agree that our salary situation is getting sticky. This summer, I see re-signing West as a must. One we see what that amount is, then they can start the work to see if it is possible to keep Danny. By the end of the season, they should also know enough about Danny's recovery to have contingencies in place for choosing between Danny and Lance, and whether there is a chance to retain both (depending on West's new contract amount).
If I were the Pacers, I would do my darndest to try to lock Lance in this summer. Perhaps try to give him more years with some reduction in annual dollars. That way he gets some reward next season in a higher salary as opposed to 900k+. Otherwise, if they wait until summer 2014 after what will probably be another full year of improvement, and there will be several teams in a bidding war for him. If we can get that done, it also locks in another core player. Then they can put their plan in place to be able to trade one of Danny or Lance, if necessary.
After this season, retaining West and acquiring a backup point guard will make it difficult to keep Tyler. If we plan on doing everything possible to also keep Danny and Lance, considering the re-signing of George, that might even make keeping Mahinmi difficult. But Green and his 3.5m have to go, and we need to sign some of the low- end guys at 400k, not 890k. If the bench fodder want won't play for minimum, then we need to move on to the next set of candidates. But we need to quit overpaying guys to sit in sits. Heck, if they need candidates, maybe the two of us can sit in suits behind the bench and ogle the Pacemates for 400k apiece.