Engadget has reported that the first generation of Intel's upcoming  'Pine Trail' Atom CPU will not be capable of full high definition playback.

The new processor, which integrates the GPU and CPU on the same die, was demonstrated at the recent Intel Developers Forum playing video content in 480p. When asked if it could handle Full HD (1080p) Intel responded that the first generation is not intended for Full HD, that sort of performance is on the roadmap for future versions.

What is the point then of Pine Trail? By placing the CPU and GPU on the same die Intel is able to make the entire platform more power efficient, and also smaller. This will enable it to be placed into even smaller devices than netbooks, possibly even mobile phones. There would also be some speed benefits in the way of latency as data has less distance to travel between the CPU and GPU.

All indications however are that the first generation of Pine Trail may in fact be slower than the current Atom + GMA combination.  We won't have solid performance figures until it is released and benchmarked but in Netbook Market's opinion: don't hold your breath for Pine Trail...