god, I hate to say this, but,
Rollo is right in many ways with what he said. nvidia's market cap is a LOT higher than amd's. From a company value perspective, nvidia could very well swallow amd whole. AMD probably has pretty good poison pill and other types of protections in place, however, plus if either nvidia or intel tried to buy them there would be some serious anti-trust issues brought up. Nvidia has done nothing wrong with their letter to analysts; as mentioned by others in this thread, nvidia is simply trying to paint themselves in the most favorable possible light. Don't forget that many AT members have criticized amd for resorting to multi-gpu solutions to finally best the 8800gtx, too, and that is only in MOST popular titles, not practically every one as the 8800gtx/ultra were from nov 06 to jan 08. Pricing is hardly favorable for the 3870x2 when it's compared to an 8800gts 512, either. 465 shipped is the current price on newegg, while you can get an oc msi 8800gts 512 right now for 280. there's certainly a performance difference between those 2 cards, but most people would have a hard time justifying $180 more for a 3870x2.
AMD is clearly in a better place today than it was a month ago or a year ago. Many posters here are probably happy to see that; I know I am. I personally like competition in the gpu arena as I think that it benefits all of us, and I am likely to pick the underdog if the price and performance are reasonably close to the top dog. That's one of the reasons that I have a 3870 right now instead of an 8800gt. I do like the stock fan better since it exhausts the heat out of the case and is quieter than the 8800gt, too, but at the end of the day I know that I could have paid a little bit more and gotten a commensurate performance benefit. Right now nvidia is clearly still the market leader so they're getting scrutinized very closely, but let's remember all of the buildup to the 2900xt... ATI did more than their fair share of truth-stretching and even outright lying in that instance.
ok, somebody shoot me now.
EDIT: oh, and to address the "nvidia is scared of amd" statements that are pervading this thread. Nvidia has reason to be concerned with a resurgent amd right now, but "scared" might be pushing it a little. When you're on top, your main competition is yourself. If nvidia can't get the 9800gx2 out and in volume soon, they'll lose some high end business. If nvidia can't get g100 or g200 or whatever it's called out before r700, then they'll be in a little bit of pain. They might even not make as much money in 08 as they did in 07, but they had a GREAT year in 07 by almost any measure imaginable. They are still the market leader in many segments and they have a reputation that amd would kill for. People blindly buy nvidia cards right now b/c they don't know that a 3850 destroys an 8600gts. If anything, amd should be scared right now of what response nvidia will have to 3870x2. Again, I hope that amd remains competitive and I would be pleased to see 3870x2 on top for a while (preferably with a huge performance increase from great drivers support), but, frankly, I don't think that nvidia has been sitting idly by with their recent windfall profits. AMD's gpu division is probably, if anything, having some of their profits since the 3800 release siphoned off to patch up the rest of their leaky ship, while nvidia has little else to distract itself and/or waste money on other than badass new gpus that will actually let us play crysis at 1680x1050 with 4xAA. Ok, maybe that's pushing it, but you know what I mean.