Ahh, no. While it may seem that AMD is hurting, they have much more potential for the future. Having chipset, CPU and GFX options that are good and getting better, I don't see how they are in a worse position.
Also worth considering is that it seems like all three companies (meaning Nvidia, AMD, and Intel) seem to want to bring the CPU and GPU closer together to take advantage of GPU architecture for things CPUs are inefficient at. Nvidia is trying to do this with CUDA, but their relationship with Intel isn't the best so they either have to develop their own CPU (Tegra?) or continue to sell their GPGPUs as add ons. Then you have Intel who already has the CPU and is working on developing their own GPU, Larabee. However, you also have AMD and under its umbrella is both a strong GPU and CPU, and is already on track to converge the two on a single die with Fusion. If Fusion-style processors really are where the technology is headed, it's not unreasonable at all to say that AMD is in a better position than Nvidia, maybe even better than Intel.