Transmeta sell a family of RISC/VLIW processors called crusoe that have a built-in compiler/interpreter ("Code Morpher") that can convert 80x86 instruction set, in realtime, into its own RISC/VLIW instruction set, and hence is able to execute PC software.
Much of this technology was created for optimising a computer language called Self, and further developed by HP's project called Dynamo.
Because RISC/VLIW processors have a simpler structure and many less transistors, the Transmeta processor needs significantly less power; and because RISCy instructions generally run more quickly than 80x86 instructions it can start to compete; in theory even run more quickly.
Using less power is important for lap-tops and in server farms- the lap-top's batteries can last much longer (about twice, since the display takes considerable power), and the air conditioning requirements are far lower (more than ten times) respectively.
One downside to this technology is that the compiler takes time to run; when programs start to run the compiler has to convert the instructions and this takes time.
This leads to a practical issue- benchmarks usually don't run for long, and hence will make the processor seem slower than it really is.
Additionally, as there is only a finite cache for the converted programs, the program can need recompilation more than once; creating worse performance for a short time as you switch applications.