Yup, in response to sony ms have dropped the prices on all the 360 models including the up and coming elite model

Analyst: Xbox 360 Price Cut Imminent
>> From next-gen.biz:

Wedbush Morgan Securities analyst Michael Pachter stated in a note to investors today that Microsoft will announce an Xbox 360 price cut tomorrow at the start of the revamped E3 Media & Business Summit, which takes place all week.

He said that the price cut will affect all three Xbox 360 models. The $299 Core pack will drop to $249; the $399 Premium pack will drop to $349; and the recently released $479 Elite model will drop to $399.

Such a price cut would be a likely move for Microsoft following the PS3 pricing announcement today. Sony dropped the price of the 60GB PS3 from $599 to $499 and announced an 80GB PS3 with MotorStorm bundled for $599. The price drop appears to be in response to lower-than-expected sales of the console.

Xbox-Scene News: Analyst: Xbox 360 Price Cut Imminent