I do not think Elite is covering the top-end any more. When Elite is first released, in addition to 100 gig extra space, it has HDMI output (+ stupid HDMI cable) too. Now, the only difference is 100 gig extra space which hardly justifies the extra 100$ price-tag. If, they bump up the HD space to 60 gig on pro models, they definitely have to do something else to make Elite more appealing. Bluray drive is a good answer.
The more Sony closes the gap in terms of games, the better MS has to do in hardware value (or price) department. In the last two years, if someone asked me what would be my console of choice, my answer was a clear 360 because of the many high-quality 360 exclusives + live features, even when the price gap is/was just 50$ last xmas. Toward the end of this year, with many AAA games coming to PS3 including MGS and GT5, with bluray now being the winner of the high-def war, with in-game XMB coming, and with almost equal quality third-party games, I am not sure if I can give the same answer unless MS differentiates 360 with some other way. This might be the price (pro: 300$ mid-year/250$ before xmas) or some other new hardware features (built-in wifi in pro/blu-ray drive in Elite) or combination of both (pro:300$ with 60 gig drive+built-in wifi). Without those, I am not sure if MS can sell another 7-10M this year.
