Despite its smaller size, Via has led Intel in key areas. Via executives anticipated the shift towards inexpensive, low-power processors at a time when Intel executives were still promising to hit clock speeds of 10GHz or more with the power-hungry Pentium 4.

With the Nano processor, Via hopes to compete against Intel in the market for more powerful systems than the low-end laptops powered by its older C7-M chip or Intel's Atom.

Intel isn't sitting by idly. On Thursday, company officials confirmed an updated version of its Atom processor is now shipping for netbooks. The Atom N280 is only marginally faster than the N270, running at 1.66GHz instead of 1.6GHz. But Intel has added a chipset that supports a faster 667MHz front-side bus and includes a hardware decoder for 720p high-definition video -- a feature that was not originally counted among the basic computing tasks Intel envisioned for netbooks.

These new features give the Atom some added muscle, filling in gaps against Via's Nano, which uses an 800MHz front-side bus and is paired with Via's VX800 chipset. Like Intel's GN40 chipset used with the Atom N280, the VX800 also includes hardware video decoders for high-definition video playback.