When they are punching at a lighter weight as nVidia cards (8800GT for instance) that have been around far longer then they certainly arent viable
There is no area where they are significantly inferior (the same of which could not be said of for example, Phenom, where the power consumption and overclocking is a deal-breaking downside, lower price or not) though.. AA/AF performance does leave something to be desired.
They are decent lower end cards but simply cant compete on the level they were actually designed for
With the 2900 cards being out first ATI knew full well where it was performance wise, the 3800s weren't supposed to be aimed at a different market/price point but yes you could say the 2900 performed below expectation (and most likely it did, I have not seen enough comments by ATI to say but I'll take your word for it).
As you rightly pointed out aswell, the HIGH end ATI card only competes performance wise with mid range nVidia cards aswell.<<---Thats very poor
3870 XT is pitched (price wise) at the mid range, there it should be judged.
Thats opinion rather than fact
Yes it is but if you look at the feature set and performance of 780G in comparison to the competition it really is outstanding. I would even go further than my first comment and say it is a solid candidate for the best IGP ever released. In a recent comparison RD600 was poor; feature set wasn't great, handicapped by SB600, the DFI had a reputation for overheating and stability issues (whether that was down to ATI or DFI difficult to be certain but that only DFI picked it up must say something).