The X-Box is now the same price as the Gamecube in Europe... I can easily see it dropping here to 149 at least. Microsoft is selling them at a loss, but if no one buys the console, no one will ever buy the games.
Of course lowering the price only will encourage people to hack linux on it. Now there's like 3 ways to do that with the new 007 Nightfire hack. I wouldn't mind having a Microsoft subsidized PC. If it becomes "easy" to put a fully functional version of Linux on the X-box you can kiss the X-box goodbye, MS will have to pull it.