Seems to me like they're still calculating if it would be better to cut prices in order to move more consoles, or keep prices up for as long as possible to fill the holes in their pockets. Remember the Xbox product line has been loosing money since day one, and dropping the price would probably eat away whatever profit they're making now.
Another negative factor for Microsoft, and probably one of the biggest things keeping people on the fence from buying Xboxes, are the red rings of death. AFAIK they're a result of cutting expenses by using cheap components, and eliminating them by moving to better (more expensive) parts would cause even more short term losses.
The 360 is definitely going to do better than the original Xbox, but there are a few problems Microsoft has to solve before having a shot at a user base of 50M+. A lot of very high quality games are coming out this year's holiday season for all consoles, and we'll probably be able to tell fairly accurately how the console war is going to end up by New Year.
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