Wow. Desperate much, Microsoft? That's a lot of cash to put behind a hostile takeover. Microsoft is obviously serious.
Will it Go Through?
I think yes. Yahoo is a pretty stable company - it would take a while for its value to grow that much. Better as a Yahoo stockholder to take the money and run.
Good for Microsoft?
If they don't mess with Yahoo's workings too much, I think yes. Of course, Microsoft will have two of everything all of a sudden - two search engines, two email services, two mapping sites, etc. Some heads are going to roll, and most of those heads will be on the MSN side (MS wouldn't be buying Y! if they didn't think the Y! stuff was better).
Good for Yahoo?
I think that Microsoft will keep all the Yahoo stuff, and they can provide a bit of stability. There is one really big way that Microsoft could screw up everything though: making Yahoo use Microsoft software.
When Microsoft bought Hotmail it was running FreeBSD and Solaris on its servers. They managed to switch it all over to Windows in only three years, which is an amazing accomplishment. I seriously doubt they could do the same to all of Yahoo though. Yahoo is orders of magnitude more complex than Hotmail.