I think a lot of people hold Favre to a different level than the regular person. I'm not saying all people are one way, but I think based on the competitiveness of Favre, it's safe to say he wonders what it would be like to stick it to Thompson and McCarthy.
My guess is Favre and the Jets is a one time thing. I think the Jets would take him back, but he'll want to move on. The Jets don't have any history with Favre so they'll grant him his release.
Favre will sign with the Vikings because
A) Adrian Peterson
B) Knows the system and has quite a few friends on the staff
C) He really wants to prove to McCarthy and Thompson that they made a mistake. He wants to prove to Packer fans that the Packers made a mistake.
I hope I'm wrong, but it's kind of the hunch I'm getting.
Either way I think I'd be shocked if he retired. I think he'll keep playing even for the Jets.