They'll likely sell it as a GPU to cover R&D costs, but in my opinion that's not Larrabee's biggest potential. I agree with others here though that it will take a 32 nm Larrabee II to have an interesting rasterization solution ánd see what that other potential is.Larrabee is primarily a rasterization-based solution. I'm not sure where all these raytracing rumors come from. Sure, the hardware could do raytracing (the hardware *is* general-purpose after all), but that isn't what Larrabee will mostly be doing.
By the way, I'm not sure if anyone pointed out yet how easy it might be to scale Larrabee. Intel could keep using the same architecture and manufacture it on 32 nm as soon as the fabs are operational, and the same is true for 22 and 16 nm. GPU's on the other hand are redesigned from scratch every major generation and always a step behind on silicon technology.
Another advantage of keeping the same ISA is that the same software can be used and kept evolving. RAM bandwidth, embedded L3 ZRAM cache, issue width, thread count, etc. it all just becomes a parameter in the driver/compiler software. And the software can even adapt itself to the application behavior.