Headley is a quality player who is having a career-year at the plate, and manager Joe Girardi could put him at multiple positions in the field.
However, according to ESPN's Jayson Stark, the Padres are looking for a package similar to what they got for Mat Latos last season. In that deal, San Diego brought in three quality prospects (Yonder Alonso, Brad Boxberger, Yasmani Grandal) and Edinson Volquez, their top starting pitcher.
If they're asking that much for Headley—and all indications are suggesting that they are—then the Yankees should hang up the phone.
Headley is a better player than the Yankees' in-house replacements for A-Rod (Eric Chavez and Jayson Nix), but he's not worth the Padres' asking price. And when you consider that Rodriguez should be back by September 18—which would give him at least 15 games to shake off the rust before the playoffs—this rumored deal becomes even more unnecessary.
The Yankees still have an 8.5-game lead in the AL East, so it's not like they're fighting to make the playoffs. They should just sit tight, play Chavez while A-Rod heals, and hold onto their assets for future endeavors.