Yeah, the main problem I see with the Balotelli to Milan thing is that I can't see City managing to sign a forward in January that they would consider good enough to make them willing to release Balotelli.
I could almost see Balotelli going to Milan, though, if he were to leave City, as his transfer fee and wages probably wouldn't be a million miles away from the combined transfer fee and wages of Robinho and Pato.