AMD acquired ATI back in 2006. Since then, Radeon video cards have continued to grow in popularity. Based on this strength, the company feels that consumers identify well enough with the name for "Radeon" to lead the brand. It also pointed to market research it conducted which showed that AMD as a brand would in fact be stronger in the marketplace against graphics competitors.
The change will take place later this year when the next wave of cards will be announced under the "AMD Radeon" label. They'll still be battling it out head-to-head with Nvidia of course, but it won't seem quite the same without the ATI name.