A 100 price cut on the PS3 is suicide at this point. Sony are predicted to start turning a small profit on the PS3 this year, but it would be nowhere near $100. They have lost too much already to become profitable and start losing again right after.
MS on the other hand should be smelling blood at this point. They are an aggressive business and I would expect aggressive response to a PS3 price cut. Everyone thought the arcade pack was the most retarded thing ever, and now look at it. MS makes moves based on the future even if they seem detrimental at the outset.
Like someone said, MS is better off to fight aggressively now and gimp Sony to a point where there is no longer a fight during the next round of consoles.
"Man is born free but is everywhere in chains" - Rousseau
