The Inquirer has an analysis about the 65nm R600. They say they've never claimed the 80nm R600 would be canned and that the 65nm R600 is part of AMD's new GPU manufacturing strategy which will be similar to the way they make CPUs.
This should result in cheaper chips and better performance:
First, R600 is going to be more affordable than any GPU part after Radeon 9700Pro and 9800Pro. AMD wants to undercut current high-end price bracket by $100-150, so expect an 8800GTX performing part for the price of 8800GTS. This is not all.
The company is getting the 65nm part on line as soon as possible, as this will enable savings in power well within the 60-100 Watt range, depending on what part are we talking about.
As we already wrote months ago, AMD developed four completely different PCBs and the company wants to cover every possible demand from its partners. We have talked with mid- and high-ranked executives and they told us that AMD plans to bring its customer centric mantra to every aspect of business.
If 65nm high-end GPUs end up on boards for $300, $350, to $400 a new era will begin indeed. Some of our AMD sources claim that most price brackets are achievable, the only real limit is yield. If AMD gets great yields from the 65nm R650, company will ship not hundreds of thousands of high-end chips, but rather millions and millions of these chips, bringing prices down and redefining its GPU sales profile.