I'm much less inclined than the rest of the people posting to be happy about this.
If Intel has so much control over the market, why did they lose market share when they had inferior processors? Why did they make so much money, and allow AMD to make so much money? If they were trying to put AMD out of business, they could have priced things very low and accepted much lower profits, but they never did. In fact, AMD is still around, and outside of ATI, has no reason to even exist with the poor processors they create. Yet, Intel lets them exist by pricing their own processors in a way that allows AMD to still exist, despite selling processors that are significantly slower than Intel's previous generation, and a lot larger as well.
Intel knows they will never be the only processor maker in the world, and it is far better for them to have AMD around, then other possible scenarios. The most obvious one would be IBM buying AMD, and this would create HUGE issues for Intel, since IBM has excellent design resources, and excellent manufacturing technology.
The reality is, when Intel made a bad processor (Prescott), they lost market share. When they made a good one (Conroe), they gained it back. Considering the other advantages Intel has, including software, and much better supporting products and manufacturing technology, I would say the market reacted pretty normally.
If you wanted an AMD based computer, you could get it, and it was functionally identical to an Intel based one, except for trivialities like performance, power use, etc..., that really are not very important to the average consumer. This as opposed to Microsoft and Windows, which if you were to get a competing product, would get very different functionality and a very different user experience. The difference in productivity could be remarkably greater than the difference between processors, in most cases.
AMD is not going anywhere. They might get bought, but they will not disappear. Intel is not stupid, they'd rather compete with AMD than IBM after they bought AMD. Heck, IBM was going to buy Sun. You think they wouldn't buy AMD if the price were right? Getting out of the PC business made it even more natural. You don't think Intel fears this?