A anonymous poster on Slashdot says:
"Atmel is sampling the first in a new line of 32-bit system-on-chip processors that could spell the death of the venerable 8-bit microcontroller market by offering 32-bit performance at 8-bit pricing. Priced as low as $3 each, the AT91SAM7 chips with ARM7TDMI RISC CPU cores and built-in RAM/flash memory may even be able to run a form of Linux called uClinux. The death of the 8-bit uC market has long been predicted -- sounds like the end is nigh!"
The link to this article just about covers it:
While I think that the original poster is premature in forecasting the end of 8-bit uCs, this is nevertheless an interesting move from Atmel. Pity they don't come in DIP form for us hobbyists with more thumbs than fingers...