The solution allowed Microsoft to cut production costs because it requires less chips, heatsinks and fans, not to mention a smaller motherboard and power supply. Replacing many components with fewer, more efficient parts leads to less power consumption and heat generation, which inherently means the machine is more quiet and reliable.
None of that is surprising, but Ars notes something that you may not know. Instead of connecting the parts with a speedy internal connection, Vejle has an on-die "FSB replacement block" with the same bandwidth as the bus that connected the CPU and GPU when they were separate. Microsoft bottlenecked the system so it wasn't faster than its predecessors.