There's been some debate about the performance of AMD and nVidia's current mid-range cards, with the huge gap between such mid-range parts as the AMD HD 2600 XT and the high end 2900 XT proving too much for some. Thankfully, AMD look set to improve the situation somewhat with its forthcoming RV670 chip.
The new part appears to based on a downgraded 2900 chip, rather than an upgraded 2600, and boasts the same 320 stream processors. It does, however, sport a reputed 256-bit memory interface, rather than the 512-bit as found on the 2900, and will be backed up with 256MB of memory. The GPU should also support Crossfire (we can't see why not), be DX10.1/Shader Model 4.1 compliant and, as the pictures indicate, will be a single slot solution.
This is made possible as the new cards are being manufactured on a 55nm process, rather than 80nm as with 2900. This die shrink also means that the power requirements can be lessened - while the move to the PCI Express 2.0 standard, which allows more power draw through the slot, means one less 8-pin power connector is required.
Rumour suggests a Q1 2008 launch, but pricing is (unsurprisingly) undecided at this time. Hopefully the smaller amount of memory and move to the smaller manufacturing process will allow AMD to bring these new cards down towards the current mid-range pricing, while pushing performance towards the current high-end. If that holds true then AMD should really be on to a winner with this new chip, bringing the mid-range to where we all hoped it would be in the first place and raking in a boat load of customers at the same time.
Coolaler forums - original source (translated).