Good luck with the lawsuit Kivin. Sadly I didn't see anything in the letter that I would not have expected to be true at any large company. Given what you know of the company I'm pretty sure you can ignore the non-compete for now, if they want to enforce it they have to sue you, and if they sue you they have to have all of this come out in court. Which they won't, so you're fine there.
Not a great resolution I know.