Pass, take the extra pick. Hope Choo ends up in the AL.
Inking Bailey and Latos (and one of Cueto/Leake) long term is the only sure-fire way to keep the Reds window open well past 2014. And that's where the focus needs to be for the FO.
Not signing Choo and dealing Philips should provide the payflex to get Latos/Bailey done. And maybe enough to keep Arroyo around for two years.