The atom in mids is the most useless thing there could be!
It's just too powerfull! Even if you run 3D games on it's 4,5" screen with 640x480 pix screen or so, it will have more than twice the computing power of a PSP.
More likely is that they are developing an all in one chip for mobile devices, running the memory controller and GPU on the same chip/die as the CPU. Their '1Watt' device!
All the while Pixel Qi (I guess) is doing effort to get more Intel chips working like ARM chips (softwarematic) which go into a sort of sleep state (or state with very slow FSB, ramspeed, and CPU speed) when not in use (eg after the loading of an HTML, when the user is reading or writing the page)...
I'm already not for mids, and certainly not for atom powered mids!
Unless we're talking about a dual Iphone screen with touch keyboard that operates like a micro laptop.