> Ok so basically this will allow type II cards( smaller) to fit into type
> III  housings and utilize higher clocks ? 

I think the idea is a bit better than that even. I think that by default 
all Type II cards must adhere/support the 5W upper thermal limit. However, even 
in a Type II slot the card may negotiate with a housing and if the housing 
can support heat removal from the card to allow it to operate at a higher 
(10W?) limit, then the card may then utilize a faster clock rate or 
activate more cores (at that point).

> Also from my understanding the
> type III card will be the physical form factor used for the EOMA 200
> standard ?

No, I think this is a misunderstanding. I'm pretty sure that the EOMA-200 
standard will have 202 pins Please see the following page for details:

http://elinux.org/Embedded_Open_Modular_Architecture/EOMA-200