Microsoft won't sue anyone. I think M$ understood how to make their Windows continue to exist along with Linux. They tried this in the past, but they learned the lesson.
I also think they understood there are areas where Linux is a must for its flexibility, so all their attempts to say crap on Linux is pointless. They understood that Linux exists, and no company will ever be able to destroy it, because GNU/Linux is evolution and for some one an ideology.
I think and hope they finally understood that their only way to be credibile is to write good software and a good operating system. I think they did a good job with Windows 7. Windows 7 is not Linux, but it's their best Windows.
For the moment I don't see what's the real goal of mono, however now we have silverlight for Linux. You don't want it? I do instead.
I will probably never write down a piece of software in C#, but who are you to say someone else can't? Show me 10 reasons why someone shouldn't write in C# and I'll show you 20 reasons why there are issues with C++ or any other language.
And be sure that M$ won't sue anyone because they will totally loose credibility and their "good?" status as a company would totally fall apart. When they gave Mozilla a cake for their Firefox release, it might sound funny but you must understand that it is a little step towards cooperation. IE8 still doesn't support all of the standards out there, but they are slowly working on it. Then if IE is still a piece of crap, don't use it.
If someone writes down a wonderful software written with mono, why shouldn't you use it? Because Microsoft will sue you? Then don't cross the road because a car may run you over.