Basically true. FIFA gave them a $5m loan that was used to revamp the Aviva stadium, and the FAI dropped their threatened legal action. It was to be paid back if Ireland qualified for the 2014 finals, but they didn't, so it was written off.
The thing that's always annoyed me about the furore is that the goal only took a penalty shoot-out off the cards anyway, which Ireland were hardly guaranteed to win. It didn't change what they had to do to win outright: score in extra time. (And not lose another, of course.) I know that's still an injustice that needed addressing somehow, but the way they still bang on about it you'd think they'd been 3-0 up before Thierry banged in 4 with his hand. Certainly didn't merit a $5m handout.