BSkyB are happy, Virgin Media are happy, more importantly the investors of both are happy. It's a deal that benefits both companies. Virgin get interactive and HD content along with getting shot of some of their unwanted content division as they push on towards being a pure distributor of content, VMTV gets the expertise, experience and production resources of Sky, Sky increase their portfolio of channels and, most relevant to them, get Virgin 1's Freeview slot.
Be under no allusion, Sky
really wanted the Virgin 1 Freeview slot
I struggle to see a downside beyond paranoid people thinking that Sky are going to go out of their way to screw over Virgin Media and in the process get the Competition Commission slapping them down and probably forcing structural separation on them as the kind of abuses of their vertical integration required to do so would certainly get some most unwanted attention.