The signing of Pedro Martinez isn't exactly a pig-in-a-poke; after all, the Phils watched two auditions by the former Cy Young winner. Still, one has to ask, are the Phillies the only team which needs pitching? If not, the line at Martinez' door didn't seem all that long.
Then there is the matter of signing Martinez and immediately putting him on the 15-day DL. That move was probably done to give the Phillies time to figure out some roster moves and to allow Martinez to make a couple of rehab starts in the minors. There is probably something in his contract as well that allows the Phillies an out. Strange albeit legal use of the DL.
Finally, Martinez came to Philadelphia and underwent some sort of medical exam by the Phillies' doctor(s). Such a precondition to signing him hardly inspires confidence.
In conclusion, the Phillies are willing to risk a few dollars in an era in which some players make over $2000 an at-bat. Pedro might make ten starts if all goes well. That's $100 K per.