On July 18, 2002, the first public benchmarks of ATI's newest core, the R300 were published. This core, sold as part of the ATI Radeon 9700, was as much as 2.5 times faster than the best nVidia card on the market at the time, the Geforce 4 4600.
The 9700 supports AGP x8, which is nice, but not really a big selling point right now, given that almost no motherboards currently support it. It has 110 million transistors (the AMD Athlon XP has only 38 million), and a pin count of over 1000. That is to say, it's freaking huge. Most modern CPUs have a pin count of about 450, and even the AMD Hammer only has about 700 pins connecting it to the system.
The R300 has been subject to a great deal of speculation and anticipation since John Carmack wrote “The new ATI card was clearly superior. I don’t want to ding NVidia for anything because NVidia has done everything they possibly could; but in every test we ran, ATI was faster.” Since John Carmack is the lead designer at id software and is currently working on Doom 3 (which will essentially not run on a video card made before early this year), this was taken quite seriously.
The release of this card changes ATI's fortunes greatly. At several points in the past, most notably with the releases of the original Radeon and also the Radeon 8500, they had expected to have the top-performing spot, at least for a while. But each time, nVidia managed to either release a new card in time, or do sufficient driver optimization to catch up (see Acid Dragon's writup in Radeon). But it is generally agreed that there is no way that new drivers for the GF4 could approach the level of speed of the R300, and that the NV30 (the next core from nVidia) will not be released before late this fall. So ATI is king -- at least for a while.
In addition, ATI has been plagued by persistent driver problems since time immemorial. But it seems that ATI has taken to heart the lesson that people don't want a fast video card that crashes when you try to actually play a game, and so far, the R300 drivers seem to be stable, though only time will tell.
Personally, while I'm happy that ATI is doing well (I like it when companies compete on price and performance), I won't be buying an R300 anytime soon. At an estimated MSRP of $400, it is a bit outside my price range. But its release will mean that the price for the Radeon 8500 will drop fast, which I look forward to. ATI, unlike nVidia, releases the specifications for their cards so people can write drivers for XFree86, and I want a non-crappy video card to use on my Linux box.