RV670 will indeed have the power of the R600 or more in a 55 nanometer factor and with some new features. ATI looked at the flaws in R600 design and tried to improve them, and as a result RV670 is more like a faster version of R600 with UVD added on.
The new 55 nanometer process helped ATI produce very low power consumption on this card. The chip is much smaller than 8800 GT and it will cost less to produce.
The best of all, it will be priced nicely and US$199 will be a good start for a card that will certainly be faster than any current HD 2900XT cards. ATI will lose to G92/D8P, primarily because its Shaders are running at clock speed, while Nvidia runs shaders 2.5 times faster than the chip clock and gains a lot of performance as a result. ATI cannot do this with its current RV670 generation, but we would not be surprised if they use it for their next generation scheduled for the middle of next year.
RV670XT and PRO will be launched in some two weeks and AMD is also preparing to introduce the 7x0FX chipsets and Phenomes within the same time frame.