The best move for the Colts would be to trade down for more picks. They can still pick up a high rated quarterback, plus a couple offensive linemen. Maybe even upgrade their running back position as well. All in the first three rounds. And you know that there are teams that badly want/need luck, like the Redskins for example.
If they can't trade it, then I think they have to take whoever they consider the best QB in the draft to be. Since they need a long term solution at quarterback. And having someone sit behind Manning for the last couple years of his career, while they add other good, young talent to the offense for him to work with, would be a good strategy.