If the bio-terrorist is hidden in Chicago, [and] a player drives through Chicago [intending to move further] to Atlanta, does he interrupt the player with the announcement that he is in [Chicago]?
Yes. The BT is spotted and the BT pawn placed as soon as a player enters the city in which the BT is in (see OTB rules, page 11).
Note that Actions are performed *individually*, one at a time, during Pandemic, so the player's intended action to move on to Atlanta is irrelevant. The moving player can freely decide either to do that or to do something else (such as capturing the BT), upon spotting the BT.