The Rockets did trade this pick. They bought it back to take Chandler Parsons.
As Feigen notes, Houston took Parsons, a 6-foot-10, polished small forward out of Florida. Assuming the Rockets make a few moves and make room for Parsons on the roster, I'm excited. He's a real good player, one that I think has the potential to be a starter down the road, if not a solid bench staple in the league for years to come. He does a little bit of everything well, from shooting to passing to running the floor. His athleticism is a little suspect, but at 38, he's great value for Houston.
Regarding Houston's roster space: according to Marc Stein, a move could be made soon:
ESPN.com sources: Houston making newly acquired PG Jonny Flynn available to interested teams. Wolves shopped Flynn liberally before draft.
I suppose I'm a little confused by this, as Houston has tried to acquire Flynn multiple times over the past year. By that account, I figured he'd stick. But the Rockets currently do have two good point guards, as well as an overflowing roster. Stein also notes that acquiring Flynn got the Rockets under the luxury tax line, so that makes sense. For those counting at home, tonight's roster movement looks like this: