Anything over $499 would be suicide. If they still go with Lockhart, that would be $299. Then they could drop the current 1X to $249 or maybe a Black Friday deal for next year for $199? Then I'll bet you'll see the S or the digital S coming in for $150 by then also. Lots of choices for the consumer next year, but there's a price point for everyone.
Besides what I already posted, I personally think MS is willing to take a loss on the SX in order to win the power crown. Sony will be in an interesting position, but I think their best bet is to take the potential power loss and come in at $399. They can't waste as much money on hardware as MS can. They *might* come in at $499 as well with something stronger than I expect at this point....but ON PAPER MS will still have the power win.
I've said it before: After how the beginning of last gen started, they would never lose the power war again. It was either go big or go home. And they seem awfully confident and aggressive this time around.