I think you'll get a $50 cut. Not $100. Too steep for Sony that's already bleeding money as a whole. You may get a $100 temporary cut on PS3 Fats to clear that inventory, the comment the guy above made about the older units becoming cheaper actually makes more sense.
MS probably counters by adding a 60GB HDD to their Arcade pack, and/or releasing their own 360 Slim. Beating Sony is the only real PR point MS has left, so they can't blow that now since neither one is going to beat Nintendo obviously.
I don't agree with the thinking that MS would just sit there and do nothing. If they blow this lead and finish third again, I think the heads of MS will be quite right in asking "what are we giving you all this money for again?".
MS' game division must be able to present a victory over Sony this gen or they are in big trouble.