O'Reilly didn't have any no-trade protection with Colorado and the Sabres weren't granted permission to talk contract before the deal was done so my guess would be no.
The benefit is solely to the player, not the team. I believe signing bonus money is outside the system in terms of HRR which reduces his escrow. It also guarantees him payment in case there's another lockout when the CBA is up. And, as I noted in my other post, it basically makes the contract buyout proof as signing bonus money is owed in full on buyouts. If they were to buy him out, they'd only save a few hundred thousand a year on the cap.
Buffalo has done this before with Ehrhoff and Myers. It didn't work too well on either of those occasions, Ehrhoff was bought out and Myers played poorly in the early going of his front loaded deal as complacency set in. I like O'Reilly but something tells me the third time won't be a charm.