An interesting piece on ray tracing was published at CNET this week. The author says Intel showed off a four-chip, 16-core system this week that could run a ray traced version of Quake Wars: Enemy Territory at 1280 x 720 pixels at about 16 frames per second and he believes this kinda proofs that CPU-based ray tracing is a crazy idea. The author says ray tracing should have been a minor point in some future marketing campaign and says it's a mistake that it has grown into an overblown strategic initiative as it's very unlikely that ray tracing will become a required feature for any real-world software on the PC within the next 10 years or more.
Honestly, that's pretty pathetic, since you can get higher frame rates with a dual-core CPU plus one good graphics chip. Your system price and power consumption will be a tenth that of the Intel demo system.
Rattner basically implied that Nvidia must actually agree with Intel that ray tracing is a good idea because Nvidia recently bought ray-tracing firm RayScale and Rattner says Nvidia is trying to hire away Intel's ray-tracing people.
Takahashi compared this conflict with the "Phoney War" of 1939-1940 and said the real fighting will begin when Intel introduces Larrabee, a CPU-based graphics chip, at Siggraph in August.
But I don't think there's going to be much of a fight there.
Intel is trying to defend a crazy idea-- that CPU-based ray tracing is a practical alternative to GPU-based polygon-order rendering.
We can guess why they decided to push this alternative--Intel's a CPU company and its people are CPU-centric. But the numbers don't work out: ray tracing takes more work than polygon-order rendering. Going from pixels to polygons requires searching (tracing rays), whereas going from polygons to pixels merely requires a relatively simple set of calculations known as "triangle setup."
Ray tracing's advantages for lighting effects are pretty minor; current graphics chips can be programmed to get good results there too, with less work.
More info at CNET. Some photos of Intel's ray traced version of Quake Wars can be viewed at TG Daily, the reflections are really good but the rest of the world you see on the screenshots is not that good.