See thoughts of someone who was there:
http://www.bit-tech.net/hardware/graphics/2009/09/23/idf-day-1-maloney-demos-larrabee/1
Agreed on the water bit. They should have spent at least 20 lines of code on it. For crying out loud.
Since they were apparently afraid to give out any details on the underlying hardware, and the demo was this crappy, I don't think that Intel's stockholders will be very impressed either, let alone any potential Larrabee customers.
Larrabee will be either vapourware or a big flop. As for i740, it wasn't even an Intel-designed chip, but a design they bought from elsewhere. X4500 is the best Intel has come up with in a commercial product so far.