I personally think he'll take the Buffalo job. He doesn't want to be the coach that ends the Wings' playoff streak, and that could conceivably happen soon if the last couple of seasons are any indication.
Also, Buffalo has a metric ton of young talent... How fun would it be to inherit that, mold them while they're young and malleable, and then sit back and watch your creation play great hockey for years to come?
I don't have any direct links, but I recall reading numerous times Babock saying that sometimes a coach's voice becomes like Charlie Brown's teacher after a while, and that the players stop listening. I think he thinks he's at that point, and maybe has been for a while.