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RROD issues have no bearing on profitability of the 360 units THIS FISCAL YEAR. They took a write down on last years profits (er... losses..). This is a general accounting principal, and IS on the up and up.

Fundamentally, how much of the box has changed? Likely economies of scale have ramped up on the "fixed" components (i.e. the AC adapter, case etc), while production costs for the chips have come down (with the move from 90 to 65nm). I'd guess that they make excellent profit on the Elite, Fair profit on the Pro, and minimal profit on the Arcade.

When Jasper rolls out, their profit will improve across the board, but of course, we can probably anticpate a timed price reduction as well (likely to coincide with GTAIV).