Nvidia CEO Jen Hsun Huang seems rather unimpressed with Intel’s forthcoming Larabee when talking at a recent GTC event. He told a roomful of journalists that "The fact of the matter is that Larrabee has launched and launched and launched to the point where even you’re not that interested anymore".
He then went on to describe the fact that Nvidia do not speculate about anything and that their technology was latency tolerant and they could simply use another thread out of thousands of others they are executing on at any other time. He also made the point that Intel will be facing different problems as the two approaches by the companies are very different. He also went on to state that Intel had now slipped by many years.
I personally feel that with the billion dollar research funding behind Intel that they will be able to compete, if not initially then certainly a few years later.