It's not the first time that Bunga Bunga Berlu has intimated that Pep is going to City, or that it's due to our two new executives. Wouldn't surprise me if both Mario and Mancini ended up at AC this summer.
In terms of the relative merits of Pep ... I've said before that I don't think he's given enough credit for what he achieved at Barca (not just in the first team). He may well have Messi, Xavi, and Iniesta, but so did Rijkaard. If anything when Pep came in the dressing itself was a bit of a mess. From a footballing perspective it's well documented that although Barca pre Pep were easy on the eye when they wanted to be, they certainly weren't the unplayable team that they are now.
The City connection will continue to get talked about until he takes a new job, that's no surprise. What will be interesting will be if the talk intensifies, how Mancini deals with it.