Now, there are rumors that when the already delayed unit does indeed launch, that price may jump up to $260 and even as high as $400 for more powerful units. The article brings up a few good reasons, particularly hardware, on why the higher price might be justified:
These prices are reasonably appropriate, given the Eee PC's better performance vs. the XO--a 900-MHz modern Intel processor vs. the older technology of an AMD Geode at 433 MHz. However, the two machines are generally similar in other ways, and the XO will have the advantage for some users of a sunlight-readable display (although it is monochrome only in this mode).
However, there seems to be a bit of a disconnect here. When you reach the $400 and up range, you are nearing where existing low-cost laptops are already sitting. A full fledged machine, while maybe not a stallion of performance, might run you $599 – for a machine that would out-spec the Eee PC in many ways.
If Asus does release the machines at a higher price tag, I wonder if they will abandon much of the market who really did intend to go as low as they could possibly go in terms of price. Of course, this for the moment is just a rumor - time will tell.