I lived in Wisconsin for nearly ten years, and during that time the Green Bay Packers became my adopted home team. I was there for some seriously good times -- not the least of which was the Superbowl! I was there for much of the "Favre era." He was freaking amazing! Say what you want to about Peyton Manning or Tom Brady, but I would rate Favre as the best overall quarterback of the last 20 years.
But the Packers of 2005 are a far cry from the Packers of 1995. In fact, they looked more like the Packers of 1985! It's time for the team to start re-building. And if the team hasn't come up with a post-Favre strategy by now, they better get one real quick!
I don't remember exactly what prompted Coach Holmgren's leaving the Pack and going to the Seahawks, but clearly, his coaching skill has not been matched with Mike McCarthy. Holmgren took Green Bay from the near bottom all the way to the Superbowl. He did the same thing in Seattle (in the interest of full disclosure I lived in Seattle for two years in the early 90s, but I never became a Seahawks fan).
McCarthy inherited a first-rate team, and has driven them to the bottom. Favre is not too old or banged up to play another year. He could easily do it. But should he have to withstand all the pain for another 4-12 season? Or worse? Favre was practically a one-man offense last season. The offensive line sucked. If I were in Favre's position, I'm not sure I would want to stick around without some major changes in the coaching and the offensive line. The Packers do not have a quarterback able to fill Favre's shoes at this time.
Though he's made no official decision, it does seem like he's going to retire.