I am too slow typing, everything I say below has been said above.
MS has handled the introduction of the 3 SKU's well. You may or may not agree that it is a good idea to have 3, but at least their message has been clear and consistent from the beginning:
Core/Arcade: Entry level, no BC possible, limited online potential.
Pro: Does everything
Elite: For people that do a lot of downloads, media, demos, what ever.
The first two were planned from launch and no features have been taken out, the elite was added later to offer the larger hard drive while preserving the existing price points. The only feature changes they have made to any SKU is to ADD HDMI to the original two. Adding features over time is nothing new and certainly nothing to complain about. The same SKUs have been launched in the same order in all regions, though the Elite has some some unusually long delays being launched outside NA.
Now compare that to Sony's process for introducing SKUs. Before launch in NA and Japan they had two models, the 60G and 20G. Primary differences were HD size and HDMI port from what I remember, but due to pressure 2 months before launch they added the HDMI port to the 20G. So now the only difference for $100 is 40G. Then they launch in PAL with a new 60G that has different BC because they drop the EE and no 20G model. Then they launch an in Korea with only an 80G with no EE, but with no announce plan for other regions. Then the 20G is quietly discontinued in NA. Then the 80G shows up in NA but not PAL, again no announcement on plans. Now a 40G is announced for PAL with fewer features then the reduced BC 60G they already had. Again no announcement of plans for other regions. Add to this the confusion about rumble, though this is relatively minor.
So far that is 6 different SKUs in different regions in different orders. Some newer models with reduced feature sets at higher prices then older models with greater features, e.g. in NA 80G only advantage of 60G is increased HD but the 60 retains the EE engine.
The worst of all this though is not the existence of all of these SKUs but the lack of clear communication form Sony about what the product line looks like and where it is going. I know they have been in reactionary mode trying to recover from initial launch mistakes. Instead of making clear, simple and well communicated strategy changes they are throwing apparently random combinations of features out and seeing what sells. This leaves a lot of consumers feeling like test subjects and even more feeling confused about what is coming next.
As far as MSs problems, I think they have received their fair share of trashing for RRoD and they deserve more if the problems continue with the new models. You would be pretty hard pressed to find a way to call adding HDMI support bad, it does not change how games need to be developed so existing customers do not lose anything only new customers get an advantage. In terms of MS quality of BC, they have gotten complaints but they have been pretty clear form the beginning how it worked and it has not changed.
Now compared to Nintendo the MS product line is unnecessarily complicated and confusing, but if you are at all objective you have to admit that Sony is even more so with less clear reasons for their decisions.
