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According to Baseball Prospectus's EQA, Seguignol was the best hitter in the minors last year. He didn't have a very good 2002 in Japan. His major league numbers were pretty good until an absolutely horrible 50 ABs in 2001.
I don't think it's fair to compare him to Zeile because he doesn't play third. In fact, I believe he has a rep for being very bad defensively, and probably limited to 1B. I can understand the rationale for not wanting to waste a roster spot on a bench player who can only play 1B and not well.
On the other hand, I think it's odd that no team would have been willing to give him a shot in spring training, particularly an AL team where he could DH. It's also unclear how much time Piazza's going to spend at 1B. Phillips may have been a bit of a fluke last year. I still think instead of Seguignol, I would have gone with someone who could play third like Branyan, Lamb, or Houston. If we want someone just at 1B, Travis Lee is still out there, and might be pretty cheap.
All that said, I think an argument can be made that the Yankees should've held on to him. He's a nice bat off the bench and insurance in case Giambi gets hurt.

I Cheer Boston:
Game 7 of the American League Championship Series with the Yankees, a Thursday night game that lasted past midnight, drew a bigger TV rating in Boston than the New England Patriots' Super Bowl victory Sunday. The Red Sox-Yankees game had a 53.9 rating compared with 52.2 for the Patriots vs. Carolina.

Great article giving a very personal look at Bonds.

Here are some good quotes from it:
Aurilia says, ''The rest of us play in the major leagues. He's at another level on a planet with a name none of us even know how to pronounce.''

''It's a joke, man,'' catcher Benito Santiago says. ``The rest of us should just spend all our time in the dugout bowing to him.''

And here's a completely unrelated absurd quote:
“Tom Seaver was so good that blind people came out to Shea Stadium just to hear him pitch” – Reggie Jackson