1) 360 will still sell, but PS3 will be bought by people who want blu-ray more than a game console
2) Seriously, at 199$ PS3, the 360 would be at 99$ already
3) There's no if. What about if Sony didn't force blu-ray down the PS3, HD DVD would have won. blablabla. There's no one single if.

A $200 pricecut might actually just make them look desperate.

Though a bunch of people who wanted movie players would own them.

All and all price wouldn't change much in the longterm.  It'd just cause Sony to catchup to Microsoft sooner with more losses.

With Wii already decided as the winner this generation how the market will flow is basically set.  I don't see much being able to disrupt the tide.

Unless you count a bunch of people buying PS3's soley for blu-ray a "victory" in getting 2nd place in the video game console wars.

@topic
then I think the ps3 would have sold over 50M so far ;)

If the PS3 was $199, then the Xbox360 would likely be $99, and Wii $249 while still outselling both of them HD consoles combined.