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Tegra1's main problem was that it was hideously late. If it had gone up against the other ARM11 parts, it would have competed really nicely but, by the time it was ready, device makers had already picked much more powerful products such as OMAP3 and Snapdragon. As you say, those crazy battery life claims were pretty much complete gibberish.
The good news is that Tegra2 looks much _more_ than twice as fast and I've heard rumours that it's on schedule for the first half of 2010 to compete very nicely against OMAP4, Snapdragon 2 etc. Its PortalPlayer heritage should deliver some minor advantages in battery life against these other dual core chips too, but nothing major. That said, they're really reliant on TSMC sorting out their recent manufacturing problems.