According to what I read, Chapman's fastball sits in the mid to low 90's and touches 98 mph. He keeps his velocity deep into games, so he projects as a starter. Let's say that he is able to to work his way up to sit at 95 mph, with below-average control for a starting pitcher.
According to my league-based models from the last post, Chapman's strikeout rate projects at 10.3 K/9 in the NL, and at 9.2 K/9 in the AL. This is baseline, so he might do better, he might do worse, but this is a 50th percentile estimate of sorts. Now let's give him poor walk rate for a starter. Let's say he is A.J. Burnett. So we project Chapman at 4.22 BB/9, second-worst for 200 IP starters in 2009. While we're at it, let's give him Burnett's home run rate from last year as well (1.09 HR/9). Now we can approximate Chapman's ERA using FIP, a simple fielding-independent ERA predictor:
(HR*13 + (BB + HBP - IBB)*3 - K*2) / IP + (annual league constant)
For the league constant, let's use Bronson Arroyo's 2009 constant of +3.21. Putting it all together, we get:
(1.09*13 + (4.22)*3 - 10.3*2) / 9 + (3.21) = 3.90 FIP
Therefore, a Chapman who sticks in the starting rotation, puts up a 50th-percentile strikeout rate, and has A.J. Burnett's control, is a very valuable pitcher. According to Dave Cameron's calculations, replacement level for NL starters was 5.37 FIP in 2008. Therefore, the projected Chapman, over 200 IP, saves (5.37 - 3.90) * 200/9 = 32.7 runs, as compared to a replacement-level starter (i.e. Micah Owings).
If we use the general rule that 10 runs = 1 win, then Chapman is a +3.3 win pitcher, even with below-average control and assuming his 50th-percentile strikeout projection. That's a lot of projection, but if the Reds think that Chapman is healthy and almost ready for the majors, then their signing makes a lot of sense.