The Droid Guy reports that the Samsung I-400 will use Bing rather than Google for search, and notes that other Android phones for Verizon, including Merge and the Optimus/Vortex will also use Bing instead of Google. The Samsung Fascinate uses Bing instead of Google as well.
This is clearly problematic for Google. Google gives Android away for free, and makes money on it when people see ads when they use Google services such as for search, email, mapping, and so on.
So Google bearing the development costs, while Microsoft gets the ad revenue, is not a winner for Google.
Still, you can be sure that Microsoft is paying a good deal of money to displace Google on these devices. And that's why I don't think this is a long-range plan for Microsoft --- it's not clear that the ad revenue it gets will make up for what it pays Verizon and other service providers. And if Google ultimately sees that Android is becoming a loser, expect the companyto find ways to make sure that phone makers can't displace Google with Bing and Microsoft services.
My guess is that this isn't a long-range plan for Microsoft. The company would much prefer that Windows Phone 7 becomes a hit. And for that, we'll have to see what happens later this year and beyond.