The money raised is being used to support the new business model, which is described on another frontpaged article. The new business model was in response to the failure described here.

Joel and Jeff wanted to raise money for StackOverflow, not for StackExchange. But maybe the VCs couldn't see the value in having three site and licensing the software to another company(Fog Creek), so the obvious way was to fold StackExchange into the StackOverflow company. I think only time will tell if this was the right decision.