I'm not sure what you're smoking but Nvidia is going to battle hard with the 8800 GT 256MB at $200 and 8800GT 512MB at $300 as well as the new 8800GTS.

AMD's has 3850 256MB at $180, 3850 512MB at $210, 3870 512MB $270, and 3870 1GB is pretty much almost unavailable

Once the 3870X2 is out, and the 3870 is widely available, 256MB 3850 cards should run about $150. They could really put the squeeze on by killing the 512MB 3870 as a single gpu card, push the current 3850 to $125, and have a 512MB version for $175, with a 1GB 3870 for $250. That would effectively kill every nVidia card south of the 512MB 8800GT, with dual GPU cards competing reasonably well with the new GTS and old GTX on the high end.

If you read the article you'll see that the graphics card actually has 2 x DisplayPort outputs and 1 x DVI. The DisplayPort, HDMI, DVI inputs are for the TFT they're testing it with

The RV635XT is the 55nm refresh/update of the 65nm HD2600XT to be named HD3600XT. It will feature directX 10.1

Meanwhile, no news about what is happening to the rumored G96 NVidia chip, a refresh of the 8600 series, currently on the 80nm process. I saw it was coming in March, then maybe June. NVidia seems to have fallen behind in the midrange battle.