Marc Berman of the New York Post writes that Knicks GM Scott Layden was encouraged about the Knicks' future in last night's state-of-the-Knicks address in which he talked about deadline deals, draft prospects, and Antonio McDyess' rehab from his injured kneecap.

On the trade deadline possibilities: "I anticipate there will be a fair amount of activity come the trading deadline," Layden said. "I didn't say [us]. I think in the league . . . We're always looking to improve the team and if something's there, we'll do that."

However, Layden acknowledged the Knicks don't want to take on big contracts. "The way the system is now shorter-term contracts are appealing," he said. "You have to say focused on how much they make."

Layden also revealed he'll be going to Yugoslavia in two weeks to scout and meet with Milos Vujanic, who was the Knicks' second-round pick in last year's draft. Vujanic is regarded as the top point guard prospect overseas and is expected to join the Knicks next season.

While he is in Yugoslavia, Layden also plans to scout 7-1 center Darko Milicic, projected as the No. 2 pick after LeBron James if allowed entry.

Finally, Layden spoke with Knick doctors yesterday about McDyess' recent X-ray. His kneecap is healing normally and he's to begin aggressive rehab with weights. Layden indicated if McDyess wants to return this season as he says, he's all for it.

"He's on schedule, doing well, when he's ready to come back, we welcome him back," Layden said. "We don't rush anybody. We just look forward to him getting healthy."