On a related note, I wonder what would be the effect of a re-tooled (cheaper manufacturing cost) 360 with a smaller case ("slim") and integrated HDD for $199 to replace both the Arcade and Elite SKUs. No Natal in such a bundle. $249 with.
There's no information that confirms such a thing is forthcoming, but this does more or less represent the best case, realistic scenario for a new 360 SKU that is "guaranteed" a huge, permanent sales spike on par with the $299 PS3.
At this point in the generation it's too late to be playing the "lose on hardware, make up in software" game by constantly slashing MSRP below manufacturing cost, so unless MS can make consoles significantly cheaper than they already are, there won't be any major price cuts to permanently stimulate sales.
So that $149 Arcade/Natal bundle? Probably not happening.
Natal, if anything will simply keep the 360 relevant to new consumers without requiring an all new platform that will more or less reset any gains MS has made this generation. This does not mean runaway sales.