Well this was an odd decision. Driver is still playing at a high level, but at age 32 he probably has more good seasons behind him then ahead. From the 2007 Pro Football Prospectus:
He certainly is the most consistent (receiver) based on his last three seasons, and none of those figures includes the defensive pass interference penalties he's drawn...Still, he is nearing that dangerous age when wide receivers start to decline...He will not fight off aging forever, but he is a reasonable bet for at least one more productive season.
Since it is likely that the Packers have some additional cap room remaining in 2007, it might seem like a good idea to increase his cap figure for 2007 and lower it in future seasons, but the latest extension actually increases his cap figure in each of the next three seasons plus added a contract for 2010.
There is nothing horrible about the extension, but it seemed unnecessary. If he manages to hold off father time or injuries and remains a productive receiver into his late 30s, then it is unlikely that his last season will be 2010 anyway so it isn't like he was trying to sign his last contract. Since the NFL is now handing $32 million to WR Kevin Curtis maybe Driver was privately upset that he locked in at last season's prices and GM Ted Thompson was trying to make it up to him.