Yeah, I don't think it's as serious/dire as 3dFX's situation just yet. Both ATi and Nvidia have had some lousy cards [relative to each other] in the past, but they seem to always bounce back within a generation or two. That's a good thing for us consumers.
ATI's last 'bounce back' happened after it got taken over, for what that's worth.
Not saying I'd want to buy NVDA, but acquiring it before the release of its next gen architecture would be a good time. Kind of like EA with Take Two Interactive.