Engadget has gotten the scoop straight from the horses mouth as to what AMD's plans are for its next gen netbook/ultra-portable processor.
For a while there it was assumed the 45nm Conesus processor would be it, taking Intel's Atom head on, but Director of AMD's mobile division Bahr Mahony has stated that the "Athlon Neo" platform will arrive first which is built around the existing 65nm manu process. It's slated for release sometime in March in the U.S.
We can expect AMD's Neo platform to produce significantly better processing power than Atom, but this will be at the cost of battery life with the 35W thermal envelop of the Neo chipset and the inclusion of discrete ATI Mobility Radeon HD 3410 graphics.
At least this way high definition 1080p playback and other intensive tasks are possible; hopefully the additional grunt won't be too much of a compromise on overall efficiency.
More details here.