Do anything to keep him
Try to keep him. Everything short of handcuffing him to his teammates is fair game.
Seriously, great players who grow to be as tall as trees simply don't grow on trees. The Magic have the best center in the universe. They had that before (Shaq), couldn't keep him and watched him win titles elsewhere.
Do you think they won't regret letting another future Hall of Fame center go? Sure, Howard ultimately might want to leave, but he's also forcing the Magic to do everything in their power to build around him by bringing in a top scoring guard or help in other forms.
And why is that bad?
It's good for him and good for the Magic.
Dare Howard to leave
I'd call Howard's bluff. The Magic are winning. They also, per the collective-bargaining rules, can offer him an extra year and higher annual raises in a long-term contract.
Try to acquire another strong player. Keep winning. Dare Howard to leave in free agency. Though him walking away from $30 million is somewhat misrepresentative because he would make up some of that in his next deal, he would walk away from the extra year of security.
Unless Orlando can get a package similar to what the Nuggets scored for Carmelo Anthony — and Denver clearly won that trade — you keep Howard past the deadline and call his bluff. There's always cap space if he leaves.
Trade him ASAP
Trade Dwight Howard and move on. This saga has lasted long enough. There has been Howard trade speculation for two seasons. It has been unfair to the players who actually want to play for the Magic.