I'm not sure how reliable this information is but according to FudZilla AMD is working on the ATI R700 GPU.
They heard this GPU will arrive in the first half of next year and will be build at a 55nm process:
Our knowledgeable sources also confirmed that R700 is a multi core design and AMD calls it Multi Core Unified Architecture. This sounds like a couple of cores stitched together in a high end chip and a single core for a small chip.
On some previous roadmaps the R700 was scheduled for Q1 2008, but the way ATI has been delaying its products, I think its safer to say first half of 2008. This is what AMD uses for years, so the little ATI will have to fit in.
If the R700 can go up against the G100 remain to be seen.