Not just to fund terrorists in Iraq and elsewhere (though that undoubtedly is still the prime destination for the money). No, it also goes to buy stuff like this: http://www.washingtonpost.com/wp-dyn/content/article/2007/11/12/AR2007111200802.html.
In case you're wondering why the Saudi Prince's name sounds so familiar, he's the guy who offered the former Mayor of New York City, Rudy Giuliani, $10 million to help with the "rebuilding" after 9/11, though he added as a precondition that the U.S. had to "re-examine" its policies in the Middle East. Giuliani, in not so many words, told him what he could with his "gift".
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