As I gather it, Microsoft Game Studios is going to be doing all the real "work" of making these next-gen RPGs, under the direction of Sakaguchi/Mistwalker. Mistwalker is just a startup company, and probably not capable of putting together anything bigger than a handheld game right now.
And then once these two games are done, they become the property of Mistwalker, and get published by MS.
Also, Sakaguchi is supposedly taking up an "advisor" position on XBox2 development, particularly in how the XBox2 relates to Japan. He probably wants to do all that he can to make sure his new games don't bomb.
So really, Mistwalker is making out like a bandit with this deal. Of course, it seemed obvious that someone was going buy out Mistwalker, sooner or later. Microsoft just won the race to do it. It's a victory for MS, and they're obviously not worried about how much money they paid for it. And they're apparently giving Sakaguchi the keys to MS's Japanese XBox HQ, which... can only be a positive move.
MS is apparently not "locking down" Mistwalker (it's just a two-game contract, for now), which means that their DS game (Mistwalker's first "real" game) shouldn't be affected, and their potentially-growing relationship with Nintendo isn't in jeopardy.
All in all, I think the only groups really losing here are Sony and the "FF7 fanboy" crowd. MS is moving upward. At the expense of Sony's popularity, not Nintendo's. Which chips away at Sony's very foundation. It would've been nicer if Nintendo had pulled off this victory, but... they didn't. Perhaps a stronger MS might make it harder for Nintendo to score the #2 position with the Revolution, but if that's Nintendo's aim then they've probably got bigger things to worry about.