She'll go 300 hectares on a single tank of kerosene...

Apparently, Schilling is going to the bullpen for the short-term, though possibly not until after the All-Star break. As I see it, this means one or several of the following:

a) Foulke is likely going to be down for a while. That Schilling wasn't activated immediately means he is probably going to take his spot on the active roster as soon as Foulke goes on the DL.
b) Schilling is inconsistent and won't start this year. This could be in response to his poor second outing and his prolonged lack of activity, making them fear that he would be getting stretched out for another month. They want to get some use from him this year (before August) without scrapping his season, and they will build up his strength in the offseason.
c) The trade blotter is littered with few pitchers the Sox are interested in, or they all are too expensive for their tastes. Since the bullpen needs the most help and they want to get the best arm they can in there, Schilling is the logical choice; Schilling is more effective against lefties than Arroyo while more consistent start-to-start than Wakefield (and that doesn't include the Mirabelli as catcher problem). Basically, starting pitching has gotten them 4 games (by the loss column) ahead in the division, even with a destructive bullpen. Fixing the pen helps out marginally more than upgrading the rotation and moving another pitcher to the pen.
d) His stuff is there, but he can't get back his feel without facing real hitters. This is just a wacky way to rehab and is not necessitated by anything else.
e) Schilling will never start again, or his stuff is permanently ruined. Hopefully, this isn't the case.
f) Somehow, Theo thinks this will help his negotiations with Boras and Hansen, the closer the Sox drafted who is thought to be close enough already to be a September call-up.
g) Schilling wants to pitch in the majors so bad he is willing to take a reduced role in lieu of continued rehab.