On September 5th the new prices will take effect in the US.  This price cut drops the price of the Elite and 60GB Pro $50 each and drops a nice $80 off the Arcade model.  Here are the new prices:

Xbox 360 Arcade $199
Xbox 360 $299
Xbox 360 Elite $399

This move should stimulate sales for the Xbox 360 since it is now the cheapest current generation console.  The 120GB elite is now the same price as the 80GB PS3.  This also brings the 60GB model to the same price that the original Xbox retailed for at it's launch.  I expect Microsoft will see very good sales in September and all the way into the new year since people will take advantage of the lower price and buy Xbox 360s for holiday presents.

Source:
majornelson.com