Well an x86 cpu from nvidia is not such a far fetched ideea. Given the fact that both Intel and AMD have a graphics division and in their roadmaps we are sure to see CPU with GPU functionality embeded into them. So nvidia needs to have a product to compete in this market and this could be a good exercise for them even thou they might not release an actual product.
We will see what the future brings...

I also couldn't quite imagine NVidia having sufficient patents exchanged with intel to build a fully featured x86 CPU (?)

Would also be a bit odd to try to attack two major players in this far-developed and expensive industry.

The only reason I could think of, would be an Nvidia-designed "Larabee" competitor placed against the intel GPU/CPU combination clearly targeted against ATI/Nvidia - that one could compete for sure and would make sense. It would also mean that NVidia would be taking intel's stride into that new region much more serious than their first responses made it seem.