Intel had nothing that could compete with PVR's performance / power ratio at the time. Using their own technology would have put their product outside the TDP requirements for their intended use. If I get to speculate I believe they tried to bundle their in-house GPU technology with the Zxx Atoms but just couldn't get the TDP low enough and had to toss in some external IP at the end.
The Intel part of the Poulsbo GPU is pretty much a 945gm and the docs are available at intellinuxgraphics.org. They also released source code but as you might know, it never got accepted into the Kernel. At least not until Alan Cox, who is employed by Intel (though I'm unsure whether he is paid by Intel for this) cleaned it up and took out the PVR blob glue.
Sure, they could have handled it much better by supplying their part of the driver straight up at launch. This is what they have been trying to do with Cedarview. Specific documentation on the GPUs that gma500_gfx supports is something we'll probably never see because of the gray area where Intel IP ends and PVR IP begins, but those parts can be figured out from the source code.
In retrospective, what they could have done was to never release Poulsbo at all. But then we wouldn't have anything to argue about.



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