The offer was definitely made, and is being considered
http://blogs.ajc.com/uga-sports-blog/2010/01/09/uga-no-announcement-imminent-on-dc/?cxntfid=blogs_uga_sports_blog
Georgia does not have a lot on D. Bama's 12th best defensive player would be the first or second best player on UGA's D. Smart is going to find that the cupboard is bare. UGA also has big questions at QB and on the line.
More of a downward move than lateral. If it is true, he could have stayed at Bama for a couple of more years, and gotten some head coach offers based on the team running Saban's scheme. Now if the defense fails it will make his stock go down.