As far as Toronto goes, this move by no means makes them a contender but it does put them in a position where they can make a run at the playoffs. Especially considering how weak the bottom half of the East is. A starting 5 of Jose Calderon, Demar Derozan, Turkoglu, Bargani, and Chris Bosh is solid.
We may want to think that after ever free agent is signed a team becomes a contender, but I don't think that Toronto will be very good, even with this deal. Hedo and Bosh are both borderline all stars and Calderon is a solid player, but I'm not so sure about Derozan and Bargani. Apparently Derozan is still a few years away and was picked based on "potential." Considering he's a stick and didn't do much at USC I wouldn't expect much from him this year.
Bargani is nothing special. One of the worst number 1 picks in recent memory, he's done nothing significant during his time in the league. He's been in the NBA a few years now, he should be domninat, not just average.
Toronto doesn't have much of a bench, maybe just Jason Kapono if he's even still there. I'm not sure of their coaching situation now either.
It would be a stretch for them to make the playoffs in the East. They'd be behing the Cavs, Celtics, Magic, Heat, Hawks, Bulls, and Pistons. They are going to be fighting with Indiana, Charlotte, and Philly for the last spot. They have a tough road ahead on them up north.