The whole situation with Microsoft & Intel over the 915 video chipset and Vista is really a lot more than just another class action lawsuit. It illustrates the major problem Microsoft is facing with the race to the bottom of PC OEMs.
Technology may evolve but people's buying habits don't. A lot of people go out and buy low end machines because they're cheap. These days that means people are buying up netbooks that are slower than most desktops/laptops being sold 4 or 5 years ago. Maybe they'll splurge and go for the $600 laptop which is probably short on RAM, has slow disk IO, and uses integrated graphics.
Microsoft needs to be able to figure out how to make Windows scalable enough that it can run on a $300 netbook or a $3000 high end workstation. If they can't, they're in trouble. As it stands now these OEMs are definitely not happy giving Microsoft 20-30% of the sticker price for a Windows license. They're not going to give up their narrow profit margin to meet higher specs. They will use Linux instead and offer Windows only for the higher end models. (as HP and others are doing now)
As I see it they have 5 major netbook related problems:
1) Intel's ATOM is faster than the Via C3 but it's more expensive. Not by much but when you're selling a $300-$400 machine every penny counts. Via will remain competitive in netbooks simply because they are willing to undercut Intel on pricing. If a cheaper option exists, some OEM will use it and get a competitive advantage.
2) GPU. None of these netbooks, even ATOM ones, are really adequate in terms of GPU. This isn't going to change anytime soon. NVIDIA doesn't have an x86 CPU yet (they will, but that's another story) and AMD/ATI are uninterested in the market. (because they're apparently just as stupid as Apple re: netbooks) So that leaves you with Via & Intel. If you were going to pick two companies to NOT design a decent GPU they would probably be #1 & #2 respectively. Intel's next-gen GPU design, the one brought to you by the environmentally friendly team that designed the P4) is a power hog. It won't get anywhere near a netbook. The newer GMA designs are OK but they're not finding their way into netbooks yet probably due primarily to price.
3) x86 CPUs are just not as power efficient as newer ARM designs that offer power saving features Intel currently only offers at the highest end. This matters because NVIDIA has decided to use ARM for their netbook processor. (for now at least) If you're using ARM then you're using Linux. Another problem for Microsoft.
4) Probably the single most concerning thing for Microsoft... the nettops are coming. The explosion of the netbook market is about to hit the desktop too. Without as many space limitations it's entirely possible we're going to see $100-$200 nettops at retail in the next year. At that price point it's simply impossible to use Windows.
5) Linux just makes a lot more sense on these devices. It's slimmer, more customizable, more portable, cheaper (free) and is completely capable of doing the tasks people want from netbooks. I'm not sure there's anyway Microsoft can compete unless they want to bite the bullet and just make Windows for netbooks free. I don't think the management at Microsoft is forward thinking enough to understand they have to take that radical step to compete.
If I had to offer Microsoft a solution I would tell them to focus on Windows Mobile. It's just inconceivable that they'll ever be able to make Vista/W7 run well on extremely low end hardware or ARM. WM though can do both. Unfortunately, it's quite a terrible operating system so that's another problem to deal with. It's probably more salvageable than NT though.