Given the $8MM+ owed to 35 year-old starter Esteban Loaiza, Billy Beane chose to hand him over to the Dodgers solely for salary relief. The Dodgers basically inherit Loaiza on a one-year, $7MM deal for 2008, which is less than he'd cost on the open market. If healthy he's a more than credible fourth starter. He had great success for the Nationals in the NL back in '05.
Loaiza slots into the fourth slot for the rest of the season, behind Chad Billingsley but ahead of David Wells. Ned Colletti did a fine job adding two respectable starters for nothing. One consequence of the acquisition is that the Dodgers are likely to turn Randy Wolf loose rather than exercise his $9MM option, according to Ken Rosenthal.
You can read a history of Loaiza's ailments and misdeeds since the A's signed him here.