Intel Atom - What about the ULV?
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Clearly a redesign of the XScale CPU wasn't going to fly for UMPCs. While tiny and cool, it was built on the wrong architecture. So why didn't Intel just use the Ultra Low Voltage CPUs they already use in some smaller notebook computers for the new UMPCs? We learned with the XScale that Intel needed an x86 processor, and this is just that. The Core 2 Duo ULV runs between 1066 MHz and 1333 MHz with 2 MB cache. It also doesn't use over 1 volt of power even under a complete load. It sounds like a great CPU to throw into the new UMPCs, doesn't it?
For a UMPC like the ASUS EEE, it would be fine. It's on the bigger side of the UMPC spectrum, has enough room to cool it, and has the space to hold it in there, but the ULV CPUs go for $300, so you're going to have to raise the price an extra $200-$250. That's pretty much a deal killer for the EEE.
And when you go down to the handheld UMPC level, the CPU, even running at 10 watts, would be too hot for the device. The physical size of the CPU would be an issue as well. And once again, you are hit with an extra $200- $250 you need to charge for the device.
What is the Atom?

The Intel Atom fits in where the XScale and ULV CPUs fall short. Take the XScale's size and cooling and the ULV's power and x86 architecture, and you get the Atom. It offers the x86 and the x86-64, meaning it will run not only your traditional 32-bit OS and software, but also the 64-bit versions. It also offers some features that have only been seen on full-fledged CPUs, like SSE3 and hyperthreading. Since the Atom is geared towards UMPCs, the extra instructions should help multimedia and gaming.
As great as it sounds, it may be inefficient compared to the other architectures such as the ARM due to the die space required for the x86-decoding. The x86 instructions will make the Atom a great CPU for mobile devices, but it probably won't be as efficient as an ARM processor.

The next thing the Atom has going for it is its size. Sure, all CPUs are small when compared to the rest of the PC, but the Atom is really small. I'm sure you have seen this famous picture of the Atom CPU vs. the penny. The penny wins in size, as the core is even smaller. Its size will ease integration into small devices. The small size also means less material needs to go into each CPU, which should help keep the cost of production really low. Indications are that it will go for around $44, compared to the Celeron M, which runs at least double that.
The last major advantage the Atom CPU has is the heat output. The ULV CPUs produced only 10 watts of power. The Atom looks set to smash this by offering between 0.01W and 2.5W power. This means that a heatsink will be non-existent -- and probably unnecessary.
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