I don't think he is a madman. I think he will stop at the eastern provinces of Ukraine - occupy Kiev and then talk with tanks to back up his peace proposals. Plus a puppet regime in Kiev for the foreseeable.
He won't want millions of disaffected western Ukrainians within his borders. The eastern Ukrainian provinces tend to be Russian speaking and generally pro Russia. It's like the British justification for holding onto Northern Ireland.
I don't think there will be a shooting war involving NATO troops. Perhaps mercenaries though. There will be plenty of condemnation, and sanctions.