Houston is far enough away that the people there will not be in the way of rescue, recovery, drainage, work crews. They can also easily distribute goods, service medical care there.
One thing that really isn't being mentioned much at this point is that we are just entering September, with 3 months of Hurricane season to go. Another one will very likely hit the gulf, not this powerful of course, but it will just add to the misery. Houston seems to be the best place at the moment. The Astrodome is air conditioned, large enough to accomodate crowds. Many good hearted Texans will start welcoming some of these people temporarily in their homes, and things will be improved quicker on the ground.
I don't think it is realistic to put anybody near New Orleans until after November.
I am not that opposed to getting them in the AstroDome. A stadium is not a terrible place to house people temporarily, if it is fully functioning.
i think the key here is to just get the folks out of NO. I'm assuming that a vast number of them have friends or relatives in other, safer locales whom they can shack up with for a while, so won't all have to be taken to the Astrodome.
It has to be made clear to them that they will not be going back to their homes for weeks, if at all, so they need to start making plans to stay somewhere for that period of time and not in the Astrodome.
Then find out where they want to go and give them bus or train fare to get there. If that were done in earnest (and I expect it will be), then there should not be that large a number of people who have to be accomodated at the Astrodome or anywhere else.