Phoenix is a legit threat.
Phoenix's offense isn't susceptible to many methods a coach would use to counteract it. If you slow the game to a crawl, it only hurts your team, because Phoenix has great ball-movement. And, Phoenix's bad defense is exactly what makes it next-to-impossible to slow the game to a crawl...what are you going to do, pass up the easy lay-up to kill clock in the first quarter? Oops...we took the lay-up, and now Phoenix is off-and-running.
You could stall the 80's Laker's fast break by slowing the game down, because LA played good defense and didn't offer tempting, all-too-easy shots. Won't work against Phoenix.
You could press, which, of course, can actually work against you and speed the game up. Phoenix has Diaw as the X-factor here. With Nash, Barbosa, Diaw, and Bell in a pinch, Phoenix isn't very susceptible to a press or a trap.
You could try to defense Phoenix, slow its offense, and hope your offense is better. It won't be. Teams like Utah, with their precision offense, might even shoot a higher percentage, but Phoenix will ultimately triumph because of just how many three-pointers they make...and how many different people can make them.
In my opinion, there is one way to beat Phoenix:
1) Keep the ball in Nash's hands. If Nash can score 50, so be it, but you decide which 50 those are. They're 50 points on three-pointers and free throws. 50...even 60 points...but no more than 5 assists. Even if you have to foul him, he doesn't get to PASS.
2) While keeping the ball in Nash's hands, play a BIG defender on him. And I don't mean just big as in taller - I mean big as in "I'm going to knock you on you @$$ if you come anywhere near the lane. And I'm going to do it before you shoot or pass." In other words, BEAT NASH UP. He's a tough little guy, but tough little guys who go through the lane should get beat up a lot more than Nash does. Single-cover Nash. Heck, back off of him a bit on the outside. And if he wants to get familiar with the lane, give him a good CLOSE look at it. Even if Nash keeps bouncing back like Iverson does, he won't do it through a seven game series at the same level as the Nash that makes Phoenix a devastating offensive team. And the slower he gets, the bigger the load he has to carry.
You see, there's nothing more annoying to a teammate than a point guard who takes all the shots - whether or not they're good shots quickly becomes irrelevant. If you want to upset Phoenix's chemistry, turn Steve Nash into Stephon Marbury. And when he tries to do that, make it painful for him. Doing that, you disintegrate the Suns' chemistry twice - you take Nash away from his game, and you take Nash's teammates away from their mindset of "share the ball." Turn a point guard against his teammates, and you've got an ineffective point guard regardless of who that point guard is. And if you slow Nash down a bit in the process, more's the better.