Mike Hindman has a good (and lengthy) blog post up about where the Rangers stand, revenue and market-wise, and the state of the farm system...
On the payroll thing, the Rangers should be able to afford to have a higher payroll than they have right now...but that doesn't mean that it makes sense to go out and spend a bunch of money on the Torii Hunters and Livan Hernandezes on long-term deals this offseason. A high payroll is no guarantee of success, obviously...but it also certainly makes succeeding a lot easier...
On the farm system, I do think that what we are seeing is Daniels taking a long-term view in trying to build the system. And who knows...maybe this is a side effect of having a g.m. who is about to turn 30, rather than 60. But Daniels appears to be trying to turn this into a system that can be a powerhouse, long-term, even at the cost of some short-term pain.
This spring, one of the things that zywica and I were harping on was that, although the Rangers farm system was near the bottom this offseason, it had the potential to get real good really quickly, with several guys who had breakout potential and the bonus draft picks. And I think we've seen that borne out, especially when you factor in the swag brought in from the Lofton, Gagne and Teixeira trades.
The system is really stacked at the lower levels right now...and when you factor in the development of those guys and a likely top 10 (possibly top 5) selection next year, I think you could see the Rangers with one of the top 4 or 5 farm systems in baseball after the 2008 season.