Intel is set to launch its chart-topping Core 2 Duo chips later this week, but AMD seems determined to try to steal the spotlight.

On Monday it dramatically slashed prices on its processors to better compete with Intel's chips, and announced it was buying ATI.

Yesterday it held a demo of its 4x4 platform for PC enthusiasts, which is meant to deliver performance that will rival and perhaps surpass that of the Core 2 Duos.

The demo was eye catching. The 4x4 system, equipped with two dual-core Athlon 64 FX chips, clearly outpaced an identically configured PC with one dual-core chip on every test they showed, from multitasking scenarios with a game and other apps running in the background, to media file transcoding.

Of course, the real performance test will be against Core 2 Extreme machines or systems with Intel's upcoming Kentsfield quad-core processor (originally due out next year, the chips may now debut by year's end).

Pat Moorhead, AMD's VP of Advanced Marketing, who was the master of ceremonies for the event, included one other bit of significant news: Buyers should be able to get a bundle with two FX-branded processors to use with the 4x4 platform for less than $1,000 (about £545).

Clearly this $1,000 bundle won't give you the top of the line Athlon 64 FX chip, but it should still give you a nice performance boost over a single dual-core PC.

Unlike workstation-class dual-socket motherboards, the 4x4 will allow the same kinds of tweaks enthusiasts expect, from overclocking to voltage changes, and it will use unbuffered memory. At launch you'll be able to plug in two dual-core chips but the 4x4 platform will be compatible with AMD's future quad-core chips. Because it has two sockets, the 4x4 platform feeds its four cores via two separate memory channels (each holding up to 2GB). That may allow faster performance since the two CPUs won't be competing for memory resources. Intel's Kentsfield is a single-socket quad-core chip, so its four cores share memory resources and all traffic goes through a single bus.

What will you do with all that processing power?

AMD, Intel, and various other industry players have put forth several usage scenarios. 'Megatasking' is one, where you're not only running two apps with heavy demands on your CPUs, you're running three or even four such apps – maybe a gamer has email going while he plays two sessions of World of Warcraft as two different characters. Or maybe you upload your recent vacation video and your PC/server automatically encodes it for DVD burning, posting to the web, and sharing via your mobile.

For that to happen, applications have to become more multicore aware, beginning with the operating system. Windows Vista will build in such intelligence, and many games, graphics applications, and DVD-authoring programs are already there.