Each player wanted the other to come to their respective team, at the time Paul was with the New Orleans Hornets and Howard was with the Orlando Magic. Neither player really wanted to go to the others teams.
They ultimately compromised with the Dallas Mavericks, because they knew that the team could make it work financially to sign both superstars. Dallas tried to make trades to get the two players in town, but no offer seemed to satisfy the teams.
Both Howard and Paul could have just became unrestricted free agents in the 2012 off season, and Paul was ready to head to Dallas. However, Howard was not ready to make a decision, and was still undecided about his future with the Magic.
Paul became irritated with Howard and decided against playing in Dallas, and then asked the Hornets to trade him:
Frustrated, Paul eventually grew tired of waiting on Howard, gave up on the Dallas plan and asked the Hornets for a trade. After the Clippers acquired Paul prior to the start of last season, Paul opted into the final year of his contract for the 2012-13 season, postponing his free agency by a year.
Howard then opting into his contract for the 2012-13 season which also delayed his free agency for one more year. Frustration grew again with Howard and the Magic, but heading to play with Paul with the Clippers was never going to work out. Both are in the same town as Howard is playing with the Lakers. The two have not talked to each other in a long time, and their priority to play together is now unlikely.
Both players are still free agents this summer, and the Mavericks are likely going to be in play to try to lure one or both of them to Dallas. However, Howard and Paul are leaning toward re-signing with the Lakers and Clippers.