I don't know the specifics, but the buyout is less than the full amount, and the cap hit is spread out over a period longer than what was actually left on the contract. You could also bury a player and his contract in the AHL minors, but I think they don't do that because it would make the whole team seem bad to any free agents who might otherwise sign with them.
As for the trend of contracts being long term, it's a sign of the hard cap. You could sign them short term, but then if they have a great season that you expect them to when signing them, they will likely fetch a prohibitively expensive contract extension or you will just lose them as an unrestricted. Performance incentives are probably only going to happen when the team has the upper hand, otherwise the player can just look elsewhere.
Contracts like Hossa's are probably going to be a problem, they are super heavy front loaded, and last so long that the player will likely retire before it ends (the intention). The player gets more money, and the team gets a lower cap hit for each year, and in the end I'm sure retiring probably circumvents the team from keeping the contract against the cap.
