Even if Intel does come out with such a beast, it would not be top of the line high end cores... 
See Intel Labs take on it:

http://blogs.intel.com/research/2007/09/making_virtual_more_real.php

Then there comes the need for an OS. Linux goes up to 16 cores OK now. Solaris can go up to 256 on X64 now, but DELL really doesn't seem to take Solaris too seriously... So then, why again is DELL talking about this? Out of all the vendors, DELL is the least capable of taking advantage of such a chip. DELL really has nothing to add to HPC and are just regurgitating what INTEL has provided them.
Where's that war GPGPU vs CPU war of 2008/09 promised by INQ?

http://www.theinquirer.net/en/inquirer/news/2007/04/03/gpgpu-vs-cpu-will-be-the-war-of-2008-9
"Sir, that is a trademarked phrase for which you have not given proper credit to the rightful owner, who I hasten to add is "Intelâ„¢"; the organization that possesses that particular intellectual property. "

Is this idiocy or sarcasm? The word "core" has a long-established meaning in CPU manufacture and you should note that Intel haven't trademarked the word by itself, mostly because they'd be laughed at for doing so. And I think you'll find it's "Intel®" and that *you* have been careless with the "intellectual property". Further reading for the remedial group can be found here:

http://www.intel.com/intel/legal/tmnouns2.htm

Um, indeed, corporate whore!
If each one of those cores dissipated as little as 2 watts that's 160w of heat. The reality is probably closer to 5w so that's 300w. Great idea, now they can sell a chiller with each system.
Why is Dell talking about 80 score processors ? As if they have anything to do with designing even a single core processor. Its getting old, how they constantly regurgitate Intel's (and other company's work), like they contributed to it. They do it to make poor suckers think that they are a technology company, and buy their "me too" computers. All they are is the Walmart of technology, and no amount of pretending is going to change that. They are a marketing and procurement company (masquerading as a technology company), and that is why HP and all the other OEM's (that actually have an R&D budget) continue to eat their lunch.
80 cores shouldn't be hard to do at all. In fact, I wouldn't imagine Intel would have trouble putting a full 256 cores on a die, so long as they're all 6502s that run at 1 MHz.

Performance per core. That's the catch.
The thing with these massively parallel CPU architectures is that they're aimed at replacing another massively parallel system in modern computers: the GPU. Thus systems with 80 CPU's won't be needing a dedicated video card for gaming. The thing to watch is the software abstraction layers for this (DX11? and OpenCL?) for this type of hardware.

How fast each one of those 80 cores is going to be compared to a single core of today is also of concern. Most attempts at massively parallel chips today (Cell) compromise too much in terms of single threaded performance and ease of programability to reach a target die size. An asymmetrical design with a few fast, large cores and many smaller, slower cores maybe the best hardware solution but proper support would requires some significant kernel level tweaking for best performance and power consumption.
Alex, you are making the incorrect assumption that each core will be equivalent to today's full-fledged cpu. That is not the case, Intel has already leaked/specified that the cores will be stripped-down "in-order" units with many less transistors than a full-fledged core in today's dual and quad core systems. Read more on larrabee for the details.
More likely it is 4 this year, 8 the next and then 12, etc.

And Intel and AMD will make us pay handsomely for each upgrade.

Why jump to 80 in 2 years when they can get us to pay for it may times over with each quantum jump...?
now how will these run Crysis?

And when is there gonna be a new version of Fractint>?

Fractal proggies+80 cores=extreme edition coolness.
I don't think we'll see 80 cores in 2010. We're in November 2008 and we have a maximum of 4 cores, with octacore processors coming next year. We're still way too far from 80 cores, I don't see them coming till 2020.
The shown graph hides a problem. Dell combined the performance per CPU core with the performance gain from a multi-core architecture, and then they plot the development over the past decades of the product. The shown result is an exponential increase. The problem is that the performance as a function of the number of cores is asymptotic. Increasing the number of cores only delays the inevitable.

However, hp kept telling VMS users that Itanium is the only option because the x86 architecture would not scale well beyond 8 CPUs (or cores). That may be true, but nevertheless an 80-core x86 CPU will sink even the most expensive Itanium, besides the fact that people are not happy to pay 20 times more for an (hp) Itanium system than for an x86-based (Dell) PC. And that is why we read about all the great new x86 stuff and nothing about the Itanium.
Notice Flatness of curve from 1970 to 1990. Back when this was ALL Locked Up in TV Stations, TelCo & Business.

Look at 2005 to Today, What increase in Change, yet 4 core wasn't mid 2005 item, so this must include preliminaries of announced plans. Little Logo is 6 times larger. Oh,Boy.

Grease Your Palms & Twinkle Your Eyes while Choosing NEW System, My Friend. Its Latter Than You Realize. Soon Research will be beyond Desktop.
Its Gonna be ME & MY Big Screen World. Whats Next? 256 Core was announced few days back, So Keep on Calmly Waiting.
drashek

So that would be a super-duper 80-core processor with 72 of those cores idle, while the other eight attempt to run Windows "BALLMER EDITION"? Adding extra cores seems futile for the consumer until software can catch up and exploit them. Even most professional 3D applications don't make use of more than 8.
I saw an 80 core intel chip running at this years gitex in dubai..

Thats all
Even if Intel does come out with such a beast, it would not be top of the line high end cores... 
See Intel Labs take on it:

http://blogs.intel.com/research/2007/09/making_virtual_more_real.php

Then there comes the need for an OS. Linux goes up to 16 cores OK now. Solaris can go up to 256 on X64 now, but DELL really doesn't seem to take Solaris too seriously... So then, why again is DELL talking about this? Out of all the vendors, DELL is the least capable of taking advantage of such a chip. DELL really has nothing to add to HPC and are just regurgitating what INTEL has provided them.
Where's that war GPGPU vs CPU war of 2008/09 promised by INQ?

http://www.theinquirer.net/en/inquirer/news/2007/04/03/gpgpu-vs-cpu-will-be-the-war-of-2008-9
"Sir, that is a trademarked phrase for which you have not given proper credit to the rightful owner, who I hasten to add is "Intelâ„¢"; the organization that possesses that particular intellectual property. "

Is this idiocy or sarcasm? The word "core" has a long-established meaning in CPU manufacture and you should note that Intel haven't trademarked the word by itself, mostly because they'd be laughed at for doing so. And I think you'll find it's "Intel®" and that *you* have been careless with the "intellectual property". Further reading for the remedial group can be found here:

http://www.intel.com/intel/legal/tmnouns2.htm

Um, indeed, corporate whore!
If each one of those cores dissipated as little as 2 watts that's 160w of heat. The reality is probably closer to 5w so that's 300w. Great idea, now they can sell a chiller with each system.
Why is Dell talking about 80 score processors ? As if they have anything to do with designing even a single core processor. Its getting old, how they constantly regurgitate Intel's (and other company's work), like they contributed to it. They do it to make poor suckers think that they are a technology company, and buy their "me too" computers. All they are is the Walmart of technology, and no amount of pretending is going to change that. They are a marketing and procurement company (masquerading as a technology company), and that is why HP and all the other OEM's (that actually have an R&D budget) continue to eat their lunch.
80 cores shouldn't be hard to do at all. In fact, I wouldn't imagine Intel would have trouble putting a full 256 cores on a die, so long as they're all 6502s that run at 1 MHz.

Performance per core. That's the catch.
The thing with these massively parallel CPU architectures is that they're aimed at replacing another massively parallel system in modern computers: the GPU. Thus systems with 80 CPU's won't be needing a dedicated video card for gaming. The thing to watch is the software abstraction layers for this (DX11? and OpenCL?) for this type of hardware.

How fast each one of those 80 cores is going to be compared to a single core of today is also of concern. Most attempts at massively parallel chips today (Cell) compromise too much in terms of single threaded performance and ease of programability to reach a target die size. An asymmetrical design with a few fast, large cores and many smaller, slower cores maybe the best hardware solution but proper support would requires some significant kernel level tweaking for best performance and power consumption.
Alex, you are making the incorrect assumption that each core will be equivalent to today's full-fledged cpu. That is not the case, Intel has already leaked/specified that the cores will be stripped-down "in-order" units with many less transistors than a full-fledged core in today's dual and quad core systems. Read more on larrabee for the details.
More likely it is 4 this year, 8 the next and then 12, etc.

And Intel and AMD will make us pay handsomely for each upgrade.

Why jump to 80 in 2 years when they can get us to pay for it may times over with each quantum jump...?
now how will these run Crysis?

And when is there gonna be a new version of Fractint>?

Fractal proggies+80 cores=extreme edition coolness.
I don't think we'll see 80 cores in 2010. We're in November 2008 and we have a maximum of 4 cores, with octacore processors coming next year. We're still way too far from 80 cores, I don't see them coming till 2020.
"And software will take a further 13 years to catch up..."

I struggle to find software to properly use my 4 core.

Regards
The shown graph hides a problem. Dell combined the performance per CPU core with the performance gain from a multi-core architecture, and then they plot the development over the past decades of the product. The shown result is an exponential increase. The problem is that the performance as a function of the number of cores is asymptotic. Increasing the number of cores only delays the inevitable.

However, hp kept telling VMS users that Itanium is the only option because the x86 architecture would not scale well beyond 8 CPUs (or cores). That may be true, but nevertheless an 80-core x86 CPU will sink even the most expensive Itanium, besides the fact that people are not happy to pay 20 times more for an (hp) Itanium system than for an x86-based (Dell) PC. And that is why we read about all the great new x86 stuff and nothing about the Itanium.
Any talk of software able to use this kind of power? Please dont say "Windows 9".
Notice Flatness of curve from 1970 to 1990. Back when this was ALL Locked Up in TV Stations, TelCo & Business.

Look at 2005 to Today, What increase in Change, yet 4 core wasn't mid 2005 item, so this must include preliminaries of announced plans. Little Logo is 6 times larger. Oh,Boy.

Grease Your Palms & Twinkle Your Eyes while Choosing NEW System, My Friend. Its Latter Than You Realize. Soon Research will be beyond Desktop.
Its Gonna be ME & MY Big Screen World. Whats Next? 256 Core was announced few days back, So Keep on Calmly Waiting.
drashek

So that would be a super-duper 80-core processor with 72 of those cores idle, while the other eight attempt to run Windows "BALLMER EDITION"? Adding extra cores seems futile for the consumer until software can catch up and exploit them. Even most professional 3D applications don't make use of more than 8.