Through Steve Davis' excellent new blog comes word that the DP rule is up for discussion at MLS All Star Game (or was, I'm just a bit late passing this along).
While I think the changes that Davis says might be under consideration would increase the effectiveness of the rule, I'm not convinced that Designated Players don't hold back MLS. I'm working something up on the subject, and will regale you with my thoughts on the matter in the not-too-distant future.
Among the changes rumored to be under consideration are a lowering of the cap hit for DP's (currently $415k), which would obviously increase the incentive for some teams to go out and pick up a big name player. Currently, only six teams take advantage of the rule.
While I have no doubts that a few big European and South American names might be interested in playing here if the money is equal or close to it, the risk/reward equation still makes it tough for MLS teams to pull the trigger.