Last time there was Fedor / UFC negotiations M-1 wanted UFC to guarantee fights for Aleksander (Fedors' brother) and other members of Russian Top Team. They also wanted to carry on promoting Fedor outside of the UFC, and so required a non exclusive deal.
Your right about M-1 too. Why should the UFC, as successful (read "mainstream") as they have become, get involved with guys that may not be strictly on the level. I think this was the problem with promoting in Japan after the Pride deal too, as Dana pretty much said the Yakuza would need to be involved.
It's a real shame about Affliction, there needs to be real competition in MMA promoting.
The UFC may well be the pinnacle of the sport for years to come, but they cannot rely on The Ultimate Fighter to carry on creating new stars for them. It would be far better for the sport on the whole if there were several Strikeforce / Affliction type companies promoting. It would not only give the UFC a continuing crop of fresh faces who were also experienced fighters*, but would give guys who UFC let go somewhere to fight as well.
* How serious can people take a "World Heavyweight Champion" who has only had 4 fights in his career?