Adiabatic dressed state potentials are created when magnetic sub-states of trapped atoms are coupled by a radio frequency field. We discuss their theoretical foundations and point out fundamental advantages over potentials purely based on static fields. The enhanced flexibility enables one to implement numerous novel configurations, including double wells, Mach-Zehnder and Sagnac interferometers which even allows for internal state-dependent atom manipulation. These can be realized using simple and highly integrated wire geometries on atom chips.