At the beginning of the year Sony and IBM had announced they had shrunk down the CELL to 45nm. I believe it was at CES. So it wouldn't be surprising if they got that chip in the system by the end of the year. If they get that chip in by November, and MS selling 360s like mad (like I expect with the new price point), then it's not out of the question we see another November price cut for Sony. In those last three months of the year, so much software gets sold that console makers can actually afford to take losses on hardware and still show profits for the quarter. Just look Sony's financial results last Christmas season when they showed a profit after the 40gb release.
My Top 5:
Shadow of the Colossus, Metal Gear Solid 3, Shenmue, Skies of Arcadia, Chrono Trigger
My 2 nex-gen systems: PS3 
and Wii 
Prediction Aug '08: We see the PSP2 released fall '09. Graphically, it's basically the same as the current system. UMD drive ditched and replaced by 4-8gb on board flash memory. Other upgrades: 2nd analog nub, touchscreen, blutooth, motion sensor. Design: Flip-style or slider. Size: Think Iphone. Cost: $199. Will be profitable on day 1.
