The delay is probably only a slight setback to any netbook manufacturer, as it will still take quite a while to get hardware into units and out the door once it is actually launched. When Menlow core Atoms make it to market, there will a much wider spread of Atom technology, catering to multiple segments of the market. You'll have low-power Atoms that draw less than a quarter watt of power, while still achieving clock frequencies above 1GHz. At the other end you'll have clock speeds as high as 2GHz, while still keeping power consumption to a still battery-friendly level of around 2.4W.
The Atom won't be winning any performance contests when racing against the next most common netbook CPU, the Celeron, but it will help manufacturers achieve the long-promised “all day” laptop. There are still other hurdles to conquer, particularly with chipsets. Intel is improving in this category as well, with the relatively new UL11L chipset having a TDP of only 2.3W, compared to earlier chipsets that went above 10W.