Much like the 60GB price cut before it; Microsoft has gone and cut the price of the 20GB Xbox 360 Pro in order to bring in the new 60GB Xbox 360 Pro. A smart move, especially when they're really pushing that Video Marketplace, and with Digital Distribution's ever expanding market.
Available in early August (I assume after a big shtick at E3), the new 60GB will retail for $349, the previous price of the 20GB. And the 20GB will retail at the Wii-savy price of $299. However, the $279, and reasonably shafted Xbox 360 Arcade, as well as the $449 Elite with not have there prices affected.
Personally the announcement doesn't excite me too much. If had to get a 360 I'd get an Elite, because for the money, 120GB of space is oh so worth it. Considering $500 gets you 80GB on the PS3, but at least there's slots for common memory devices (Memory Stick, Compact Flash, SD card) and not one specific 256MB card...
Info via Xbox.com