As for BluRay - I'm so glad stash thought long and hard when considering a game console before going with the PS3.
I don't game much (I leave that to the boys, they love to make the whole house sound like the streets of Baghdad) but I like having the BluRay and dvd upscaling. I'm not a console snob one way or another as it's not important to me, and the same goes for Mac v. PC - but had we spent a whole bunch of money on the XBox and invested in the HD component, I would be sad. We are both pleased and have had no problems with the PS3 whatsoever. It's been a good product for us.
I wouldn't be surprised if the PS3 went up in price, then again it was only a few short months ago they were having a hell of a time trying to give those consoles away.
My guess is that now BluRay is dominating the high def market, more and more players will be put into production which will in turn drive the costs down. Back when VCR's were new, they were like $400 and this was in the early 80's - that was a lot of coin back then. But as time went on and more manufacturers got on board, the prices went down so I suspect the same will happen with BluRay.