The pricing war that began with AMD is not over. Despite cooling from a heated battle in 2006 and part of 2007, margins still suffer from competition. Intel's performance in the 90s was strongly related to the lack of competition it faced. Since AMD released its K6 processors in the late 90s, Intel has had pressure applied to its market share.
Intel is currently the leader in performance for microprocessors, but because of AMD recent history of successful R&D, this leadership is subject to Intel's own continued successful R&D efforts. Until the Core design, Intel slipped in relative performance and was bleeding market share. With AMD's ambitious Fusion platform (2009) in development, Intel's Nehalem project (2008) must be a success in order to maintain that performance lead.