Hammer is 64 bit, but still runs all legacy software. IE: anything written for the x86 platform will still work with the hammer.
Intel, like you said, went the other route, getting away from the x86 architecture, and making a completly new processor, for 64bit applications. The only problem is, you have to design completly new software for it, as it is not compatible with x86 32bit applications. Which is both the single largest drawback, and single largest advantage of the Itanium.
Basically, Hammer takes a step forward, but is still backwards compatible (like Windows), but Itanium takes a leap, and hopes everyone can jump that far.
__________________
==========
--Soyo KT333 DRAGON Ultra (Platinum Edition)
--AMD 1.4 @ 1.54 (11x)
--768mb of PC2100 (@140FSB)
--Asus v8200 GeForce3 @ 210/490
--Maxtor 40gb Quiet + 2 IBM 40gb 60GXPs (removable) + 8gb WD
--Audigy
--Maze 3, DD Gf3 block, 2x BIX, Eheim1250
===========
|