Nvidia's just showing off now. Specifically, their next-gen Tegra quad-core chipset, code-named Project Kal-El. As you can see in the video, the 12-core Nvidia GPU includes support for trie dynamic lighting; the first time we've seen something like this. [Nvidia]
Like I said many times before, this is why the NGP and 3DS are screwed. I guess you can argue about controls, but for many game types touch based inputs are more than fine, and Android 3.1 and ice cream will support USB devices enabling the use of XBOX 360 and PS3 controllers on tablets and attached controller devices on smartphones.