The UltraSparc IV is essentially a dual-core USIII, each core isn't going to be any faster per clock than the USIII, and it is initially going to be clocked at the same speeds. I suppose since Sun is shifting its focus at the high end toward lots of relatively slow CPUs by using multi-core everywhere, so it's actually not a bad fit to have their low-end SMP line look fast and cheap again by using Opteron. It probably means an end to the tradition of the Ultrasparc based E450/V480 type workhorses that Sun have made so much on. The move at the high end is arguably a good strategy, since the rate of gain in single-thread performance have been reducing for a while, and people have been used to writing somewhat parallel code.
Amusingly a dual CPU Opteron 248 system benchmarks very close to a (now fairly old) 14 CPU Sun Enterprise 4500 at SPECint_rate. It'd be interesting to see how it compares on more multi-threaded benchmarks.
I don't think Sun are quite dead yet, but between the monoliths of IBM & HP at the high end, and various x86 based servers eating the 1-4 CPU market, it'll take a lot of work and luck for them not to end up as another SGI, or another DEC.