According to a slide leaked on German site eeepcnews.de AMD has a new CPU coming intended for Eee PC-style Netbooks calles BGA. Running at 1GHz, with a TDP of 8W the chip sounds remarkably similar to Atom but with a twist, given the differences in AMD's architecture.
Most fundamentally the chipset power draw should be lower as AMD also has its DDR2 memory controller within the 8W CPU TDP. The die itself measures 27mm x 27mm, which is pretty darned small, although not as small as Atom - but both are about as small as needed for Netbook-sized systems.
Apparently the memory controller is cut down to the extent that it can only accommodate a single stick. That will in turn limit the maximum RAM available, although given the form factor it likely won't be a problem.
With Intel's Atom out the door and Via set to launch Isaiah in the near future it looks like we could see as much rivalry at the lowest of the low end as at the high.
Source (Now dead - AMD's legal eagles at work perhaps?).