Intel have released a Dual-Core version of its Atom Processor and computer makers have started releasing small low power low cost desktop PCs based on it. Such devices already existed with Via processors, such as the Zonbu. AMD are following with their AMD UVC processors. But Intel's name will do most to popularise such products. Just as there has been a flood of small low cost "Netbook" notebook computers, I expect we will see a flood of small low cost Nettop desktop computers within a few months. These may replace most sales of desktop PCs within a year.
If you have fast Internet connection for access to storage and net applications and are not trying to do anything needing a lot of power (such as video editing or video games), then a Nettop should be more than adequate as a home or office computer. However, users may be less forgiving of a limited function and performance desktop PC, than they are a tiny notebook. When using a notebook you can see the advantage in portability, traded off for performance and storage. But a Nettop is going to look just like any other desktop computer (apart from the tiny little processor box).
Apart from low cost, one of the advantages of the Nettop/Netbook computers is low power use. But the Intel Atom 330 uses 8 watts, whereas the single core units consume 2.5 watts. Also the larger chip will cost more.
There are likely to be at least two types of desktop computer built from these chips: the lower power chips will be used for Thin Client computers, running little more than a web browser. These will need the Internet for their storage and applications. Higher power units will be able to run more applications locally and have local storage.
Which type of computer becomes popular will be decided by the customer and the result may not necessarily be rational. Just as people buy more expensive off road four wheel drive vehicles, but never take them off road, they may select more expensive PCs which can operate away from the net, but never do so. This already happens with many corporate computer purchases. Over-optioned PCs with accessories such as DVD ROM drives and capable of running extensive software are purchased, but the corporate IT staff then spend their time trying to stop many of the features being used for security reasons. It would make more sense to buy cheap and secure Thin Client computers, but staff prefer the illusion of independence.