I wanted to wait until I had something truly insightful to say about this, but a few days on and I've still got nothing. So here it is as plainly as I can say this: NBC violated Conan O'Brien's contract, and indisputably so. They would have lost any lawsuit and ended up paying out even more money than they already have. That's why O'Brien basically got the full value of his Tonight Show contract, because had he sued NBC, he would have gotten at least that much and probably a whole lot more.
Hollywood Reporter got the contract and confirmed what O'Brien's reps have been saying all along -- and what NBC has been lying about all along -- the Tonight Show was defined as a show starting at 11:35pm and the "second network series after the end of primetime".
Although THR isn't providing the contract itself, I doubt they'd lie about it.
So there it is. NBC rolled the dice and violated Conan's contract, on top of however immoral and unprofessional their behavior may or may not have been, their actions were almost certainly illegal.
The unfortunate side of things for Conan beyond these matters is that judges generally don't enforce the terms of most civil contracts. If one side violates a contract, they end up getting a big pay day, but the contract is pretty much shredded after that. No judge would order NBC to keep O'Brien on as host, nor would they order NBC to keep the Tonight Show at 11:35. For all their status as legally binding documents -- even to disturbing lengths -- for the most part the only result of breaking a contact is paying the other side lots of money and then parting ways.
NBC knew that going it and undoubtedly calculated that it would cost them less to break their contract with Conan than it would cost them to keep the status quo. That's cut throat business if I've ever seen it and as sure a sign as any I've seen that NBC still has no idea what it's doing.