Having read this blog from the Economist, I fail to see how they think Berkshire Hathaway's investment is a risky bet.
Berkshire Hathaway will receive 50,000 perpetual preferred shares with a liquidation value of $100,000 each from Bank of America. These are a different class of shares of their own (and will have a whole load of enhanced rights) to ordinary stock and will not be diluted if Bank of America does need to raise more capital.
Bank of America is an institution which is too big to fail and will ultimately be rescued by the U.S. government should there be a crisis. The ordinary shareholders will be diluted but Berkshire Hathaway's preferred class of shares would be unaffected. In that scenario he is likely to be paid off quickly as there a cheaper forms of capital out there for the Government. Having Warren Buffet as an investor will no longer be necessary from a public relations point of view.
His main risk is a bankruptcy of Bank of America where his preferred shares could be wiped out - an outcome which would not be allowed happen in a post Lehman world.
The $5 billion of warrants thrown in are a great kicker and ultimately it is not the end of the world if they do not pay off as they were thrown in for nothing.
According to FT Alphaville, KBW reckon the the warrants are worth about $3 - 3.5 billion if he flipped them tomorrow.