It's a system on a chip. (SoC) About 1 3/8 inch squared (35mm) and containing graphics, cpu, sound and more. Even 6 USB ports! Others are working in the same vein. Silicon Integrated Systems (SiS) is also doing a system on a chip, though I'm not privy to the details. There will undoubtedly be others very soon, as well.
High end PDAs might use these, but the real target is UMPCs (Ultra Mobile PCs) and this is what has me enthused. So far, the few UMPCs out are over-priced and suffer from short battery life. This chip, along with the one from SiS and others are intended to provide enough power to run XP in some form, plus Office applications. Samsung already has one out, though it does not use one of these new generation SoCs. The Samsung device is not particularly impressive and costs a LOT more than the $500-$600 bucks that Microsoft envisioned when they started working on devices in this category. These new SoCs will be more efficient, perhaps to the point of adding significant battery life, and without sacrificing function. They will be cheap enough to cut the cost of a UMPCs innards drastically.
I'm actually excited over the potential of UMPC devices. Given sufficient battery life and assuming I have my laptop with me for night-time synchs and backups, I think one would be the handiesst accessory around. I might find as much utility in a tablet PC and wouldn't have to have a laptop around all the time.
I'm glad to see all this effort going in to what will really only be a niche market. Of course they will find their way into entry level desktop and notebook systems, as well, which is probably how the chip companies rationalize the considerable expense and effort it takes to develop something like this.