Im not going to comment on what other have wrote here but for me what I see MS doing next christmas is 1 of 2 things
1) They will get rid of the arcade(I still think its main goal was to be the cheapest next gen model out there and the first to reach 199) and have the elite priced at 199 while the natal model at 299 making the standalone natal unit 125(extra games).
Or
2) They will drop the arcade down to 150 keep the elite at 299 bundled with Natal and have the natal unit at 150 standalone.
Very outside chance that prices wont change and all models are bundled with Natal stand alone unit selling at 125(packed with more games than what comes with the consoles).
I REALLY dont see ms coming out with a console that is going to be more expensive than the ps3( ms 399 elite matches that of sonys 399 slim).

MS should just bite the bullet really and sell the 360 + Natal at $299, they would pull so far ahead of Sony and break any leftover moral of theirs, but meh, 360 is already 7mil+ ahead.

Not necessarily more but Natal is definitely not as expensive as people seem to expect. All hardware it seems to require is a camera with a microphone, and that's not exactly expensive. MS can easily afford to include a camera in every console.

Research? Yours seems to be one that relies on your instincts instead of some actual research. In case you have made research, tell me where I'm wrong - don't tell me I'm wrong, instead tell me where I'm wrong and why.

Wellllllllllllll, not really.  You see, those were never big initiatives that were were likened by MS to a new console launch.  You see, they want to get this out there to push 360's, not to make big money on (thus the ridiculous peripheral pricing).  Apples and oranges, Dog.

Not taking stever's side here, but why must he tell you where you're wrong and why? You made a claim, YOU prove why you're right. If you think it won't be expensive, give numbers, facts, sheets, whatever instead of saying something and trying to make someone else discredit it (which will be hard for anyone, since no one knows exactly how much is pouring into the development of Natal)

There is more evidence than not that Natal will be sold separately from the console. The main of which is the fact that they said that Natal will work with all current 360s. That would make no sense at all if they were forcing you to buy a bundled 360 with Natal.

WOW, all the xbox haters in here talking that a natal bundle would cost 400 - 500, news flash microsoft aren't dumb enough to price their console that high like a certain other company, lol, microsoft can essentially launch a 150 dollar xbox 360 this year if they so choose without loosing much money if any, so next year would be the perfect time to relaunch a 100 dollar xbox 360, with a 100 dollar motion camera, I highly doubt microsoft would sell natal for more than 100 bucks seperately, that would leave the cheapest xbox 360, the arcade at 200 dollars, and a xbox 360 with a 120 gigabyte harddrive for 300 dollars, with those prices microsoft can keep the current prices and add natal without raising the price of the system, next year is going to be crazy for microsoft and xbox supporters.

I would like to see what sony will do with their motion controller, will they pack it in as well.

Without a doubt, I think Natal will be both sold separately and bundled as well.  For example, I'm getting my new MW2 360 in a few weeks, so I have little interest in getting a new 360 next holiday season, UNLESS there is signifigant incentive for me to do so...such as...Bundled Natal, New integrated GPU/CPU reducing power consumption and heating cost, and maybee a few other improvments.  I'll be willing to go as high as $400 for the new console, especially if it comes with a larger HDD.  This would probably be my final 360 purchase, before the next Xbox console.  I'm just scratching my head, as to why people think it cost as much to make a PS3 and a 360...somehow...Sony has magically reduced the production cost, where $299 is a acceptable price with losses, and M$ cost are going to remain constant thru next year. 

Patchter thinks it will be $50!

It's comments like this that I envy Patcher's job. He is very well paid for making not well researched comments! Mr. Patcher justified his $50 price guess by assuming that Naltal has just "a camera". I am not a hardware expert but it is common sense that the 3D camera used in Natal is not the same thing as the one that captures the facial detail. Just looking at this he should realize that Natal requires at least two cameras, maybe even three.

Then he foregets that Natal requires a pretty powerful processor in addtion to some wicked algorithms to process all the standard and 3D skeleton images. And that's not counting the simultatnous voice recognition processing of several people.

Also, Natal is much more advanced then what Nintendo and Sony is doing with their new controlers. If MS prices it lower, they risk the public percetion that Natal is not as advanced.

So looking at these factors, Natal itself, when it launhes, should be no less then $150.
Now MS may have cost of the elite down to $200 by that time. If that is the case, a Natal package should be no less then $350. This is regardless of what Sony and Nintendo will be selling at. As MS has stated, this is going to be like launching a new system.

And a new system has the advantage of setting its own price point. It is about what value the public will accept Natal.