I saw that the Big Ten has decided, at least for now, not to deal with realignment for football in the wake of the Penn State situation. As some may remember the Big Ten divisions were created with competitive balance being the primary goal over regional rivalries, and other factors. The teams were grouped in categories and then split, with Nebraska, Mich, OSU and PSU as the big 4.
Penn State will certainly take a hit for the near term with all of the penalties, but they retain many advantages so this seems prudent. There will certainly be more defections as the season approaches, and kids have some time to look at their options. The scandal itself as well as the bowl and championship game ban will hurt recruiting. The scholarship limits will also hurt the teams competitiveness, but all these will eventually go away. You could argue the damage of the scandal will last long past the sanctions, but I believe even this will fade in short time.
Penn State will return to a perennial contender. They have one of the best recruiting bases of any school in the country, an athletic program committed to football, and money to bring in the best coaches and provide the best facilities.
That said, the next few years will be interesting for some other teams with a tremendous opportunity.
UW will only have to compete with Purdue and Illinois for the Big Ten Championship game and a shot at a 3rd straight Rose Bowl this year (I won't bother to include Indiana). UW also has an opportunity to pull some recruits from Penn State this year and in the future. UW has had an eastern focus on recruiting out of state, and I don't imagine this will hurt that.
OSU should recover this year and be primed for a big run for several years. With new coach Urban Meyer and no major rival in their division they could make a multi year run to the championship. OSU seems likely to also benefit from the recruiting issues at Penn State.
The biggest opportunity may belong to Pitt, a school with UW ties with new head coach Paul Chryst and several UW assistants he took with him. Pitt may fill some of the recruiting void that PSU will leave.