Edit: I had started part of a post that would tackle this very issue. Turns out, Mattel beat me to it by 16 hours or so. Given that, I'm throwing this up for everyone to see rather than fracture the discussion into two posts. Enjoy! - cup
While not as good as he once was, Jimmy has been well above average at SS. In 2011 has racked up 3.8 wins and already has 2.5 wins in 2012. He missed roughly half of 2010 and was still able to put up 2.5 wins. Going forward I think one could expect 3.5-4.0 wins. Replacing Pennington would add two wins over the course of a season.
Moving Pennington to the IF reserve role would also improve that position - replacing the three headed monster of Hicks, Sogard, Rosales.
Rollins is well known and an Oakland native and that can be played up to drive more fan interest.
He's a veteran with playoff experience if that sort of thing tickles your fancy.
Rollins is owed $11 million per year for 2012, 2013, 2014, and has a option that vests at certain playing time levels for another $11 million (600 PA in 2014 or 1100 PA in 2013-2014). The vesting option is probably the most problematic thing for the A's since I'm sure they don't want to be on the hook for a 36 yo at 11 million. The contract is supposedly a major impediment to trading him, but at 3-4 wins it's less than market value (13-18 mil). I supposed most teams don't have that level of payroll flexibility, but the A's do. This "con" can actually play in the A's favor if there is little interest and the Phillies are motivated to move him.
Always a risk that someone in their 30's will fall off a cliff and become ineffective. Rollins has the tools and skills that usually age well, and he's been relatively healthy during his career. 2010 was the first year he had missed a significant number of games.