hattig voted 1 on this story.
The BSD news is already on Slashdot, btw (for those of you who don't read Slashdot, but might want to read the thread there which wasn't infested with trolls for once).
The code bases will be totally merged by FreeBSD 5.0 RELEASE or FreeBSD 6.0 RELEASE, but many of the best bits will be merged sooner. FreeBSD will get better SMP quicker. There will be more developers working on one OS, and there will be better marketing and support behind the OS (provided by BSDI).
A good move for BSD I think - BSDI have released all their code under the BSD license (except for stuff covered by NDA, this is still available as a download though).