I was also blindsided by this one. I saw the rumors and first wrote them off entirely, then figured there was a tiny chance it might actually be true by the time the keynote rolled around.

One interesting thought is that with this move they can stick with PPC for as long as they want with no downside other than binaries being twice as large. These days, the size of the binaries is pretty inconsequential. There wouldn't be anything stopping them from keeping PPC machines in the lineup if they worked out to be better for server or workstation class machines.

Matthew