Only an illiterate spider monkey would actually pick Orlando over Indiana without Dwight Howard. However, I think Orlando is going to steal a game or two.
The biggest problem losing Dwight Howard presents is that opposing big men suddenly should have a field day. I just don't think Indiana can really take advantage of that. I'm not a big fan of Roy Hibbert (at least as an All-Star) and David West likes to hang around the perimeter.
Indiana lives and dies with Danny Granger. When he plays well, the Pacers play well. When he doesn't play well, they lose. While I trust that he'll take them to a series win, I think the Magic can at least limit him in a game or two.
And really, that's all it takes to give Stan Van Gundy some credibility. If he competes without Howard then he'll have proven his worth as a coach.
I think we're going to see at least one, potentially two classic Magic games where they shoot something like 21 of 48 from three. Without Howard I'd have to imagine their game plan is to just shoot threes, and as we've seen both in the NBA and in march madness, a few hot minutes from behind the arc can swing a game and cause an upset.
Personally I think Orlando would be stupid to dump Van Gundy. He's one of the better coaches in the game, and they'd be doing it to appease a player who's leaving anyway. If they do fire, him someone will scoop up a really solid coach.