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1/ I dont think they will make a 200$ price cut since it is too big for a 1 year old console that costs more than the price that it is sold.
A 100$ price cut is more probable.
And yes Sony has made a price cut on BlueRay player but PS3 is not only a blueRay player. It will not be so easy to make a massive price cut.

2/ Why do you compare it to Dreamcast, a console that the majority of the people dont know ?
If there is a price cut, people will be "happy"
I dont know if they will sell more console but people will consider that Sony make some effort to make their console cheaper. And Some people will may be make the step.

3/ Of course, a price cut on the wii or Xbox360 is possible too





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