Penryn. Nehalem. Phenom. Fusion. Inside these four cryptic code names lies the future of computer desktop processing for 2008. Ultimately, however, it's all about the epic, age-old battle between chip giant Intel and underdog Advanced Micro Devices for desktop dominance.

The harsh reality for AMD is that over the last two years, Intel has absolutely dominated in terms of performance. But performance is only half of the price-performance ratio, and AMD's willingness to slash prices and aggressively pursue the low- and midrange tiers of the desktop computing market cannot be overrated, despite the company's technological lag.

Read on for in-depth details about both Intel's and AMD's desktop processor plans for 2008, along with a quick glance at both companies' mobile CPU strategies. Along the way, you'll find the information you need to make the best purchasing decisions for your company or home.

Intel: Tick-tock

At this point in time, it appears that Intel is far ahead of its primary competition in the CPU performance race. Critics and consumers alike have unanimously recognized the chip maker's Core 2 microarchitecture as vastly superior to AMD's processors. These circumstances smell like bad news for AMD fans -- particularly at the high end.

Intel's current CPU road map is a continuation of the company's "tick-tock" strategy. According to this approach, each year the company alternates its emphasis between shrinking its CPU fabrication process and implementing a new microarchitecture.

In odd years, Intel goes with die shrinkage. Hence the shrinkage of the Core 2 processor line to an efficient and speedy 45nm process in 2007.

In even-numbered years, Intel implements the "tock" in its tick-tock strategy and releases an entirely new CPU microarchitecture. Hence the planned release of Nehalem, detailed below, later this year.

But before we jump into the game-changing aspects of Nehalem, let's take a closer look at the chip maker's Core 2 CPU plans for the first half of 2008.

Penryn Core 2 processors: 45nm and more

Penryn, the 45nm version of the Core 2 architecture, was the darling of CPU enthusiasts in 2007 because it delivered on both Intel's and consumers' price-performance expectations. According to numerous independent tests from the likes of PC World and the usual assortment of hardcore enthusiast sites, Penryn Core 2 processors put forth about a 20 per cent increase in performance on average.

Additionally, the smaller size of these CPUs means that Intel has been able to mass produce more processors per wafer of silicon, resulting in lower prices and higher profit margins for Intel. Other new and improved features in Penryn chips include improved Virtualization Technology, multimedia-enhancing SSE4 instructions and improved power consumption.

For the majority of 2008, Intel will continue to exploit the substantial performance advantages Penryn processors currently enjoy over AMD processors.