Below is an attempt to value Ramon Hernandez properties (here's Slyde's original article on the signing from this afternoon):
Hitting: CHONE has Hernandez as a -9 RAA hitter per 150G. ZiPS is similar in its projection. Given that Hernandez has been a starter the last many years, I think we can treat CHONE's projected playing time as reasonable guesstimate given that he's an aging catcher who now has an injury history. So, in 54% playing time (380 PA's; Hanigan should still get to play), converted to wins, that puts him at 0.6 wins below average as a hitter.
Fielding: Based on SB/CS/WP/PB/E rates (methods and 2007 data here), I have him at +3 runs this past season, -8 runs in 2008, and +0 in 2007. A 5/4/3 weighted average those numbers puts him at -1 RAA behind the plate. Fan Scouting Report gives him an overall rating of 3.2, which is an average rating for catchers. Given all of this, I think we can be confident in calling him a dead-on average fielding catcher.
Catching position adjustment is +1.25 wins/season, and replacement offset is +2.25 wins/season, which combined and pro-rated, adds 1.9 wins to his total. So:
2010 Projected Value
Hitting: -0.6 wins
Fielding: +0 wins
Position adjustment + replacement: +1.9 wins
Total: 1.3 wins above replacement in 2010.
For 2011, we can apply a half-win of aging (might be generous), and put him at +0.8 wins above average.
Valuing wins is tricky business given the economic environment. But if we assume that free agent salaries this offseason will be close to where they were the last three offseasons--about $4.4 per WAR--then this would put Hernandez's value at:
2010: $5.7 million
2011: $3.5 million
Sheldon reports he signed for $3 million this year and $3.25 million in 2011 if he appears in 74% of Reds games next year (which is well above his projected playing time). You can add $1 million to his contract for 2010 though, because the Reds paid a $1M buyout to get out of the last contract. Even so,this looks like a good deal for the Reds, assuming no sudden old-catcher-falling-off-a-cliff syndrome....though maybe that last concern is why the deal is apparently a bit discounted for 2010.
Update: CTrent reports that the buyout is actually a part of the $3 million. That pushes this deal further into the "decent little bargain" territory.
Regarding Hanigan: his offensive projection is roughly equal to Hernandez, and defensively he rates as an elite defensive catcher. Hanigan should be the starter in this case. He probably won't be, but again, I think Hernandez is likely to miss enough time next year that Hanigan will still play quite a bit. Hope so, anyway.