When you accept a deal with the Devil, you lose your soul. With Microsoft, it is the same thing.
No one but Ballmer knows at this point in time, but I bet that, in a few months or years, Microsoft will find a way to leverage that money to make Novell do something it would not normally want to do.
Besides, Microsoft and OSS go together like water and fire. Novell is crazy if it thinks that it got that money for nothing. It is probably going to find itself smack in the middle of a heated license argument between GPL 2.0 and GPL 3.0 advocates, plus Microsoft on the sidelines watching it take the hits and laughing all the way to the bank.
Yes, Microsoft makes buggy products. That hasn't stopped it from becoming the most powerful software company in the world. I don't see how this will be an exception.

You may be justified in your cynicism, however the mono project is an interesting and welcome by-product of the novell-microsoft alliance. I think having a choice other than java for a decent, productive, cross-platform development framework is a good thing for both communities.