It seems like the doomsday scenario: a Yankees team already with the best record in baseball adding the best pitcher in baseball? That's a tough one to take. And it certainly is a big move by the Yankees. Assuming that Lee replaces Vazquez, it's pretty hard to see anyone else taking the division from them, and it certainly sets them up as a force in the playoffs. But it doesn't close the book on the World Series.
When it comes right down to it, in the playoffs you live or die on the strength of your best three starters. And while Lee slots in as perhaps the strongest ace in the league, the difference is not as dramatic as during the regular season. Instead of booting a Javier Vazquez from the rotation, he's knocking out most likely Phil Hughes, or possibly Andy Pettitte. Neither of them are Cliff Lee, but they are strong pitchers in their own right.
The Red Sox, meanwhile, don't match up too badly themselves. I would throw Jon Lester up against any other ace in the league after his typical early season issues, and Clay Buchholz has come into his own this year. The real wild cards are Beckett and Lackey. If Beckett pitches like he did the last three years, or Lackey continues his performance from the last month, the Red Sox have their third pitcher to match up. After that, it's the first place Boston offense (that still leads the league despite injury after injury) vs. the second place Yankee offense.
The Red Sox definitely have their fair share of problems. They've been devastated by injury, let down by their bullpen time and time again, and oh yeah, still need to beat out the Rays and the rest of the AL for a playoff spot if we assume the Yankees have the division wrapped up. While the Yankees adding Cliff Lee is definitely a problem, it's not their first, or their biggest.
If the Yankees want to trade away one of the best hitting prospects in all of baseball-and the only one their team had on both Baseball America and Baseball Prospectus' top-100 lists (Austin Romine comes in at 86 on BA only) for a half-season rental of a pitcher they were going to sign anyways come the offseason, than so be it.
UPDATE: Never mind, the Yankees are no longer thought to be in the running for Lee.