"I think they can remedy the problems over time"
That's a given. The question always is, can they do it in a window narrow enough so that they don't bleed too heavily? AMD fixed the problems they had with both the original TBred and the Hammers, but they would have been in a lot better position if it hadn't have taken as long as it did...
Intel has the same problem that AMD has had, they get their pricing dictated to them by their competitor. Prescott was supposed to start at 3.4GHz or so, and then rise to 4GHz+ pretty quickly. That, combined with a smaller die would have put them in the catbird seat. It doesn't look as if that will happen, but the year is still young yet.
So the Wheel turns again. Intel is roughly back to where they were when the K7 was introduced, minus Rambus. For their sake, I hope there isn't a MTH in their future...