CPU 

As this year began, I (along with many others) was enjoying my Core 2 Duo.  For less than $300, I had purchased a dual core CPU that could be overclocked to 3.6ghz, giving me performance beyond the fastest desktop processor on the planet (the $1000 X6800).  Even though my E6600 provided excellent performance, I was looking forward to the launch of Intel's quad core CPUs, and anxiously awaited the day when those CPUs would drop in price to a reasonable level.  The Core 2 Quad "Extreme" QX6700 launched right at the end of 2006 at a price of $1000, but many of us looked forward to the launch of the Q6600, a "mainstream" quad core CPU.  The Q6600 launched at a price of $850, and dropped to about $530 in April, and dropped even farther in July, to a price below $300.  Enthusiasts all over jumped on this 2.4GHz CPU and overclocked them to 3.5GHz and beyond, providing unprecedented performance to the mainstream desktop user. 

Though Intel's CPUs generally outclassed AMD's offerings in every way, AMD fans looked forward to the release of Barcelona, the native quad core CPU architecture.  AMD hoped the barcelona advancements would put it on the same level as Intel, bringing some much needed competition to the CPU market.  Unfortunately, the quad core Phenom processors were delayed until late 2007, and even then have suffered from various bugs that has slowed or even stopped the sales of these CPUs until early 2008.  Not to mention, due to these bugs, AMD is only able to produce Barcelona at speeds of 2.4GHz at this point, which lag far behind the performance of Intel's quad cores at 3.0GHz. 

The beginning of 2008 will be crucial for AMD in the CPU market.  As Intel's Penryn architecture is released (bringing some minor performance improvements as well as fairly significant power consumption & heat output improvements), AMD will have to find a way to produce Barcelona at speeds approaching and beyond 3GHz to stay competitive with Intel on the high end.  In the mid-range, AMD's quad cores are roughly competitive with Intel's offerings, but in terms of price/performance AMD continues to fall behind.  AMD's CPU department's To-Do list for 2008 should look something like this:

1. Fix the errors in Phenom, so that we can start selling them to the public again
2. Find a way to produce Phenom at speeds near or above 3GHz
3. Produce Phenom cheaper, so that these CPUs will be price-competitive with Intel

Perhaps AMD's three-core Phenom CPUs can offer an alternative, but these will have to provide significant cost savings in order to convince enthusiasts that it's not a better option simply to purchase a quad core.

As Intel looks into 2008, it sees dollar signs.  It has so far successfully fought off AMD's best efforts even with the "old" Conroe and Kentsfield architectures, and with the Penryn refresh coming in early 2008, and possibly the revolutionary Nehalem architecture coming in late 2008, Intel's guns are loaded and aimed squarely at AMD's chest. 

As an enthusiast, I am thankful Intel is angry at AMD for the beating they took during the end of the Netburst CPUs, when AMD's Athlon 64 beat Intel's best at every turn.  Intel went back to the drawing board, and changed the CPU landscape dramatically, bringing incredibly high performing CPUs to very reasonable price points (not to mention, their CPUs have been overclocking like crazy, giving hardcore users the ability to squeeze amazing performance out of these monsters).  Without Intel's aggression, the CPU market would be stagnant, hoping for AMD's plans to come to fruition.  Instead, we are given the options of buying revolutionary dual core CPUs for below $100 up to quad core monsters for $1000.