Re: What would you do if you had this much to invest, play with, or other?
max out my 403b contribution at work and use that money to offset the income that is now going into the 403b. Hold the cash in a money market account for the short term. Alternatively, a roth IRA for some of it.
While recent history suggests 401k/403b's are not as safe of an investment as they were once thought to be, so is pretty much everything else when the market takes a bath.
The other line of thinking I have on this is to "diversify". Pretty much all of my eggs are in the 403b basket right now (and a 401k on the wife's side). The wife and I are following a David Ramsey's strategy right now where we need to pay off all debt, then save 5-6 months income, then invest heavily. Between buying the house, 2 student loans, car payments, kids in daycare, etc we piled on some debt getting established. Now we are in a good place and actively turning that all around.
Saving 5-6 months income is important because a year of unemployment can easily negate 5 years of retirement savings if you have to tap into that cash to survive.