"I much rather see MS goto 199 core system when the ps3 launches. Have the hdd available in premium pack at 299 and see what happens."
I can't really see that happening either. dropping the price of the console itself by 33% ish percent is kind of steep so soon after launch, but if you consider that for the 100$ premium of the premium pack you get a HDD, a infrared remote, a wireless pad sans batteries and cable to recharge them, and a communicator, wich all combined probably dont even add up to 50$ for MS, it'd be much easier to drop the price of the premium pack than to sell your bare hardware at even more of a loss.
And maybe I just see things in reverse but
"Err, if they were going to ditch anything it would be the premium bundle. They didn't ditch standard HDD just because they wanted to bring in casuals at launch, ya know."
I think they did do it for that reason. well not really "bring in casuals", but really just milk their head start for all it's worth, in a way that allowed them to have the system that they wanted to do from the start (premium) and also squeeze it by the 299 mark to make it giftable and cut back on the excuses people would have not to get one.
Seriousely, look at the features, is there anydoubt that the HDD is an integral part of MS's 360 strategy? so why separate it other than to merely increase the hardware accessibility during that crucial launch window? Once the hardware is established an the proverbial foot is in the proverbial door, they can get away with making much fewer compromises for the sake of the people.