Hmm...I think you are "mystifying" technology, tt_22.
DDR-II is desirable because it allows higher clock speeds than DDR (DDR-"I"), not because it is called DDR-II. With 500 MHz DDR modules available, and with R300 core designs looking competitive at just above 400 MHz, it seems simply a matter of which is cheaper for the necessary performance (I'd guess DDR, not DDR-II).
0.13 is desirable because at the the same complexity, the same clock speed, and, most importantly I think, the same level of maturity, you get each chip for reduced cost. The choice for process seems to me determined by the complexity the process allows at a target clock speed and the level of maturity of the process, and what you can achieve within those constraints.
ATI has demonstrated they can achieve quite a bit on 0.15 given these concerns. 0.13 is not a magic wand that can be waved, it is a tradeoff of the above, where a greater complexity would tend to be allowed, but with a lower maturity at this point.
The R350 need not be slower than the R300, even if more features are offered...the question for the R350 is about where its optimization (redesign of some elements to achieve better performance or allow higher clock speeds) and enhancements (adding or changing features for improved functionality at a given clock speed) balance, and whether any "extraneous" functionality was dropped in the process of this balancing.
