Personally, I am very happy with this decision by the Yankees. Joba Chamberlain is so much more effective out of the bullpen, and as good as Hughes was too out of the 'pen last season, this is the way to go. People forget to bring up the fact that Phil Hughes started 2009 as a starter, and was pretty good (or better than Joba, at least). I remember that in his second to last start, he pitched 8 shutout innings against a very good hitting Rangers team, and really opened some eyes. But since Chien-Ming Wang was coming back from the DL, and since the the Yankees bullpen was in a slump, they switched him to the bullpen, where he posted a 1.40 ERA in 44 games.
But Joba Chamberlain, as I said, is much better as a reliever. I know the Yankees eventually want him to become a starter again, but there's so much more upside to him when he comes out of the pen. He has a fiercer mentality, and throws much harder than he would if he started. I remember in the playoffs he got his fastball up to 96 mph, and I'm fairly certain that's a hard pitch to hit. After all, people do consider him to be Mariano Rivera's successor after Mo hangs 'em up.
If I was Joe Girardi, I would have put both Hughes and Joba in the bullpen and create a situation like 1996, where you had three shutdown pitchers pitch the 7th, 8th, and 9th innings. Then I would stick Alfredo Aceves in the rotation,and have him be the 5th guy. But I'm no manager, so I guess Joe knows what he's doing. But who do you think should be the 5th starter, and how would you handle Joba and Hughes' situations? I think the Yankees are handling it fairly well so far. But hey, the season hasn't even started yet.