As best I recall, it boils down to the Germans trading their sphere of influence in Lithuania for a hunk of central Poland that they occupied and didn't want to give up.
The original division would have probably been better for the Germans in most respects. Assuming that they occupied Lithuania when the Soviets occupied Estonia and Latvia, they end up considerably closer to Leningrad as a starting point, and actually somewhat closer to Moscow if I'm looking at the map correctly (it has been a long couple of days, so I may not be).
The revisions in Poland would be a two-edged sword from a German viewpoint. The downsides:
1) They would be quite a bit further away from vital areas of the Soviet Union on the central front, which means yet more logistically difficult ground to cover to get to the important areas of the Soviet Union.
2) They would have access to less Polish manpower and agricultural produce.
3) I believe that historically the division gave Germany about a third of the oil production in Eastern Poland. Presumably that would go away.
The only upside to the territorial losses in central Poland would be that the Soviets would probably move considerable forces in to defend the new territory (as they did historically with the part of Poland they grabbed), and those forces would have a horrible time defending themselves or getting out of the area.
The Soviets didn't have time to build up a logistics structure good enough to support their armies in the central part of the front, where they were mainly in annexed Polish territory. That led to horrendous problems, with their armies there incapable of being supplied sufficiently in wartime, impossible to extract in a hurry, as well as too few airbases for their planes, which main the aircraft horribly vulnerable even without a Germany surprise attack.
You'll notice that the areas where the Soviet front line was deep in annexed Polish territory were the areas where the initial Soviet disasters were at their worst. Those disasters would have probably been somewhat worse if they had been defending even further forward, with further to retreat before they got to a transport network that could support them more adequately.
Would that have trumped the greater distances the Germans had to go to get anywhere vital? I'm agnostic on that. I suspect it would be pretty much a wash or the Germans would have been slightly behind schedule on the central front, with Germany doing considerably better in the North, possibly slicing through to Leningrad before the Soviets got their defenses organized. I'm not entirely sure that would have been a good thing for the Germans, but I'm pretty sure they would have at least gotten to the outskirts of Leningrad quicker.