Dave suggests that W3C use RSS 2.0 as the basis for their syndicated data activities.  I think W3C should do just that if they really want to do something in the syndicated data space.  I realize that this will lead to another clash between RSS and Atom, this time with a major standard organizations behind each, but conflicts between standard organizations have happened before and will happen again.  I sure hope a third format doesn't enter the picture though.

RSS is a reality that will not fade away for decades regardless of what happens with Atom.  Atom initiative will also not be stopped unless everyone behind it are sent to Mars (I'll go if there is a return ticket).  I tried my best to mate them but the chance of that happening is now zero, so I am now betting on both and will try my best to make sure future extensions to either formats are independent of the container format.

Update:

W3C has obligations to its member companies as well as the public. If both Atom and RSS were bidding for W3C's attention, then discussions over merits of each format has some relevance. Since it appears not, I think it makes sense for RSS to become a W3C standard considering that many of its members are already using RSS and majority of the feeds out there are in RSS.

While this will negate much of the momentum Atom gains through IETF standardization, I am betting on both horses so I don't care which format wins.