Groklaw has a great article explaining the significance of the Microvell deal, especially in relation to the SCO saga:

SCO was the first to try to get cute with the GPL on a grand scale, and as you will see, they do it with panache, with cases and arcane arguments, even some truly silly ones, like their antitrust allegations which another judge has already laughed out of court in a companion lawsuit. Sadly, SCO's attempt to wiggle around the GPL turned out not to be the last. The Novell-Microsoft agreement also, as Richard Stallman put it, cunningly tries to sidestep GPLv2. So we have an attack from within. A serious one, because everything SCO and its backers wanted from this litigation, but failed to achieve, Novell just handed to Microsoft on a silver platter by signing that patent agreement. Let me explain why I see it that way.

The article goes on to compare the goals of SCO's legal assault on Linux and the practical effects of the Microsoft-Novell deal, noting that they are nearly identical. Where SCO has failed in its attempts to invalidate the GPL in court, Novell has intentionally side-stepped the spirit of the GPL while (apparently) adhering to its letter.

It should be noted that in both the SCO and Novell instances, it is Microsoft who is the beneficiary. It is well known that Microsoft was behind the SCO saga, whether through their dubious license payment or their alleged involvement in guaranteeing Baystar's investment in SCO. So, what they could not achieve via litigation by proxy, Microsoft gains through an agreement with a desperate company.

So there you have it, as I see it: two companies claiming to be Linux companies that turned on the GPL and the rest of the community for money, and the beneficiary is Microsoft. What a coincidence.

Does it matter that one did it maliciously and the other was merely a dope? I don't know for sure which is which or even if either is properly described since I can't read hearts, but my answer to the hypothetical question is: no. The effect is the same. It matters only in that one makes you mad and the second makes you sad and mad. That's why I call it SCO2 Deja Vu, with Novell playing the part of EV1. Only this is far worse than SCO.

I agree, this is far worse than SCO because it appears that it will hold up to legal scrutiny, but it will not hold up to community scrutiny, unless we let it. Boycott Novell.