Yeah, I think it's too early to predict what is going to happen with the high end gpu market.
The scenario that no one has mentioned yet is that AMD and ATI might work to create a complete platform at all levels - entry, mid, and high. As it stands right now, chipsets are getting more and more propietary with SLI and Crossfire. Even now, your motherboard choice dictates not only which cpu but which dual card setup you can go with. If this continues (and you happen to have a merger between a cpu and a gpu company), the logical next step is a completely propietary platform that works with only one kind of cpu and one kind of gpu - the trade off that you would make in exchange for flexibilty is price and performance that can not be matched by an "open" platform. They could make a platform that consists of two sockets, one for gpu and one for cpu with the for each coming in high, mid, and low end versions, all they would have to do is mix and match them for the different market segments. That is just one scenario, I'm sure they will think of many more...
It is obvious that AMD wants/needs a complete platform to compete against Intel, wouldn't it make sense then to make inroads into a segment that Intel on it's own couldn't compete in? Intel alreadty has very good mobile and low/mid range platforms that both Dell and Apple have adopted. What if AMD choose to go after the high end graphics workstation market and gamer/ethusiast (because they really aren't that different) and produce a complete platform for that market. Intel has nothing to counter that, and would have to go to NV for it's graphics solution if they wanted to compete in that space.
I find it interesting that everyone talks about how the high end market is not really of any concern to Intel or AMD, but that more and more we see products that compete in that space. Just a few years ago, Intel motherboards were green and boring, period. Fast forward a bit to today, and you have AT reviewing the 975BX motherboard for the conroe release - it's black and it's definitely geared towards the enthusiast market. Sure, it still doesn't touch the Asus of DFI for OC'ing, but give them time. We might see a "LanParty" style UV line from Intel yet. These companies aren't stupid, they realize that the ehthusiast market is relatively small, but they also know that us enthusiasts act as consultants to everyone that we know who aren't buying the high end parts, and they want us to be familiar with their products so we can recommend them.
Anyway, it really is too early to tell what is going to happen with AMD/ATI yet... Hopefully, ATI will continue to compete with NVIDIA as AMD in the high end space, and hopefully the merger will make them even more competative instead of less. If not, we can only hope the gpu engineers leave and join another firm (maybe XGI), or start their own. We need the competiton in this space, and I'd hate to see the talent at ATI go to waste.