After missing out on Orlando Hudson to the Twins last winter, the Nationals turned their focus to Adam Kennedy, signing him to an affordable $1.25MM deal. Washington holds a $2MM option for 2011 with a $500K buyout, but MLB.com's Bill Ladson writes that it's "unlikely" Kennedy returns to the Nats in 2011. He says he'll talk with GM Mike Rizzo about his future soon.
Kennedy's offensive success in 2009 (.289/.348/.410) hasn't carried over to the 2010 season (.252/.321/.335), but his defense has returned to form and matches up more closely with his career UZR/150 mark of 7.9 at second base. In total, he's still been worth almost a full win (0.9 WAR) in limited playing time.
The combination of Ian Desmond and Danny Espinosa, who has impressed in his debut this season, has likely spelled the end of Kennedy's time in D.C., however (speculation on my part) at $2MM he could be retained if he's willing to accept a bench role. He's seen time at second, third, and first base over the past two seasons, and still runs fairly well. The Nationals traded one utility infielder, Cristian Guzman, to the Rangers last month, so there could be an opening to fill that role.
If he does enter free agency, Kennedy will join a second base class that's once again headlined by Hudson, but doesn't feature any elite names. He'd likely be looking at a contract similar to the one he signed in Washington.