If you're a little unsure of how AMD will counter Intel's Core i7 processors, then NordicHardware have an article which should be considered crucial reading.

AMD managed to beat Intel, and NetBurst, with the K8 architecture, but over the last year, the roles have been reversed and Intel is back on top. With another microarchitecture coming this fall, Intel is certainly enjoying being in the driver seat, but AMD intends to take over with the launch of the 45nm Shanghai core later this year.

AMD sources indicate that since the biggest updates of Nehalem are the integrated northbridge and the new interface QuickPath Interconnect, it has merely moved up Intel to where AMD has been for years. They did admit though that the improvement going from NetBurst to Core was an impressive one, although expected.

Even though we did not get to see any actual performance data, or even estimates, we were told that AMD is not especially scared by Nehalem. It considers HyperTransport to be equal or even better than QPI, while what it now has to do is find ways to make its processors run faster, not just higher frequencies but also get more work done per cycle.