HKEPC have discovered that in February next yr Intel plan to start releasing low-end Conroe chips (codenamed "Allendale") with only 2MB of L2 cache, current offerings with just 2MB L2 are in fact native 4MB L2 chips with half of the cache disabled.
This you would expect will allow Intel to lower the cost on these chips, if only slightly. Head over to HKEPC for full details.
In order to lower the cost to against AMD, Intel announced to release native 2MB L2 Conroe in Feb 2007. Similarly, Merom will also get native 2MB L2 cache version at the time of Santa Rosa release. This change would bring Intel at better position to against the change of 65nm process of AMD.
The existing Intel Core 2 Duo and Xeon 3000 in the market, actually, are native 4MB L2 processors. Although they have 2MB L2 and 4MB L2 versions, the 2MB one is made by only disabling half of the L2 Cache. However, AMD is producing native 1MB L2 and 512KB L2 K8 processor to raise its cost.