What you're referring to as rebuilding, I would call draft picks working out. Had Brendl and Lundmark lived up to draft day expectations or Falardeau, Jonasen or any number of other draft busts panned out and become NHL contributors, then you could argue the Rangers were rebuilding back then just as easily. The signing of Jagr and his Czech Posse after the lockout was a quick fix that worked and after them you still had off seasons where more than one big ticket free agent was brought in and I have a hard time calling those seasons part of a rebuild. In the end what we finally have is an organization that operates like a solid one. We have drafted better, developed players better, been more selective with free agents and trades. That's the formula for success in the NHL - doing most things right and not overloading on one avenue to acquire talent. I'm not saying the Rangers are perfect or making all the right moves but after the Redden signing, I think they've gone about business the right way.
A few points: the acquisition of Jagr and the acquisition of the Czech players weren't simultaneous things. He was brought in, the team planned for a season that was cancelled, and the Czechs were brought in the offseason after the lockout. Further, they weren't brought in to make the team competitive, they were brought in to make Jagr more comfortable in NY. Eco had a good post about the seasons these guys had before they came to NY.
Second, there's a big difference between draft picks panning out and developing players. Every team will have it's share of booms and busts on picks. The good organization develops NHL players in greater abundance. That's the big, big difference in the Rangers organization before and after the lockout. Before the lockout, we had to hope that Brendl or Falardeau panned out. After the lockout, we've been much better at actual planned development, as opposed to winging it. Our farm team has done a much better job. There's more emphasis on rookie camps and Traverse City. There's more emphasis on what these players are doing before they even turn pro. I mean, look at the treatment that Callahan got from draft day on and tell me that Lundmark even got anything near that kind of contact. He didn't. And Lundmark was a highly touted first rounder, Callahan a 4th rounder. It's been a different world.
Lastly, what I call a rebuild is very simple. The prospect system was barren. The team began stockpiling picks and young players. This has nothing to do with what free agents a team signs. It has everything to do with holding onto your youth and, as in the last paragraph, developing them into pros. In the early Sather years, the Rangers traded:
a 24 year old winger who had 64 points the prior season
a 25 year old defenseman who had just established himself as an NHL player
a 20 year old 4th overall pick who hadn't broken into the NHL yet
a 22 year old 7th overall pick trying to find his game
a 22 year old winger looking to break into the league
a 20 year old defensive prospect
a 26 year old established winger
a 26 year old 2nd line winger
a 21 year old center
a 22 year old burgeoning defenseman who had some injury issues
a 25 year old D on the cusp of making the league
1st, 3rd, 4th and 5th picks
in deals centered around
a 37 year old D, later traded in the same season
a 30 year old center with concussion history, hadn't even played the previous year
a 31 year old winger with no knees
a 31 year old 2nd line winger
a 30 year old winger reacquistion
a 29 year old underachiever
a 30 year old goalie
Except for 5th rounder for Gusarov, Sather doesn't make many of those kinds of deals anymore, Clowe and Nash deals being exceptions. Maybe Derek Morris too.