IMHO, AMD's acquisition of ATI was a very smart move for the long term, and they were honest about it. They told everyone that it was going to hurt and they were going to bleed for awhile. This is the bleeding. The AMD/ATI mega-release in May is not going to be jaw dropping. At best it will bring them up to speed, but in mid 2009 you will see why these two companies merged.
AMD kicked Intel's butt for a few years and awoke the sleeping giant. AMD took advantage of their success and dug in deep with new fabs and partnerships, because they know the next few years are going to be brutal. If AMD bankrupts it will be because Wall Street is so danged short-sighted.