One of the better statements I have seen on the history, current status, and future of Atom is this blog by Vishal Shah. Here are a few excerpts, but you should read the whole thing to get a good sense of the Atom vs. RSS debate:
The history: "RSS was designed to be very simple, in fact it is even known as "Really Simple Syndication". But as RSS became popular many people realized that RSS has a lot more to offer (beginning of ATOM research)..."
The current scene: "That formed the birth of ATOM, a brand new syndication format (still in PREDRAFT) led by people (Tim Bray, Mark Pilgrim, and Sam Ruby) loving XML and wanting to enhance RSS to show it's true strength. XML related specifications were out and mature. And since Dave was unwilling to change the RSS 2.0 format except bug fixes, ATOM had to emerge as a different name with different ideas and goals."
The future: "Currently very few websites and content generators syndicate in ATOM, although that might soon change. ATOM is going to catch up soon, but RSS is still going to hang on for a long long time, because it has its base well setup in many corporate tools and applications and it is going to be a while before ATOM really takes over. The current RSS Syndication Format is RSS 2.0 and the current ATOM Syndication Format is 0.3 (PRE-DRAFT). "
Since Vishal wrote this on December 28, Blogger officially came out with Atom newsfeeds for Blogger users and several newsreaders added Atom support. For those of you who want to know more, visit the AtomAPI draft.