Is this discrete?
If readers care to follow the Larrabee link in the article, they'll see that you've already observed that a chip offering 64 threads and an x86 ISA would be able to run the OS. (Initially, that would be Linux, but don't expect MS to stand still if Intel start shipping something that makes their server line look wimpy.) Larrabee strikes me as a response to Niagara much more than GPGPUs.
So if Larrabee is the CPU, not the GPU, is this really Intel's entry into discrete graphics, or is it instead their attempt to kill the concept entirely?