The false opening price point is a key microsoft strategy. It's something they do in EVERYTHING they sell. There is always an obscenely expensive top item (Vista Ultimate, 360 Elite, Microsoft Office) and an intro item for hundreds less then the top item (Vista home basic, 360 Arcade, Microsoft Works) which people buy only to find out, lo and behold, you can't use many (sometimes any) of the features you expected.
Then suddenly when they find out only one of their computers four processors are being used and they can't expand beyond a tiny ammount of RAM and capabilities in Home Basic they have to shell out 100 dollars for home premium or 200+ dollars for a full version of Vista. The MS works user finds out almost all real functionality only comes with the 400 dollar Office suite which they need to shell out for.
Ditto with the arcade which is missing very basic features in this day and age from wireless connectivity (100 dollars) to online play (50 dollars a year) to a hard drive (100 dollars for a TINY drive. I got a 500GB hard drive for my PS3 for what an 20GB drive costs for the 360, seriously). Suddenly the 200 dollar value purchase turns into this bloated 500 dollar expense. MS more then any other company except Walmart has mastered the opening price point gimick where you make it seem cheap even though its more expensive then a better higher quality product made by someone else.
That's one thing I like and respect about Sony and Nintendo. You get a full featured console with things like wireless internet access and a complete feature set on every one you buy, there is no accessory you need to buy for full functionality just for convenience (classic controller if you never had a gamecube, Blu Ray remote ect).
MS is making buying a 360 like buying a cheap car. You come in looking for a 10k car then suddenly you found out theres no AC (900 dollars) its manual (1000 dollars) it has 1970s non power windows/doors (600 dollars) and you can't get it at the dealer without alloy wheels (2000 dollars). Suddenly the 10000 dollar car which still sucks worse then a 14,000 dollar Corolla or something costs 17,000 dollars. It's crap and I hate that they do it.
PSN ID: ChosenOne feel free to add me
