Although the first NVIDIA chip wasn't used in too many devices besides the Zune HD, I don't think that was a performance issue at all, but mostly an issue with selling the idea of a chip with heavy graphics to phone manufacturers. Well, it sems that NVIDIA is doing extremely well right now convincing important phone manufacturers, but also PC manufacturers to use the Tegra 2 chip for their upcoming tablets. Some of the names include Samsung, LG, Motorola, Asus and Acer.
Tegra 2 is set to appear in 50% of the tablets that will be launched next year on the market. This means the percentage of ARM-based tablets is probably much higher. There are rumors Intel pushed hard to bring up to 35 tablets into the market next year, all based on Intel Atom I would assume. I don't think people will want those tablets because of poor battery life, but also because they will be running Windows 7 or Meego. Windows 7 is a no-starter, while Meego might still be rough around the edges, and not a very good choice compared to Android or other tablet operating systems.
So if you're looking to get yourself an ARM tablet next year, you'll most likely end up buying a Tegra 2 tablet, which is actually great news because Tegra 2 is a great chip, with great battery life, and Android OS 3.0 (Honeycomb) will be fully optimized for it. Plus, by the time other competing chips will appear on the market, like the Orion from Samsung or the dual core Snapdragon, Tegra 3 will be just around the corner, ready to be shipped in products. Nvidia is going to have one hell of a year in the mobile market.