Damn now that could put a hole in sony's profits...
The extra year of refinement alone is going to take them ahead of the 360... The Wii is clearly a lot more innovative while the PS3 is going to be more versatile (and iirc has better graphics processing).
Of course the Wii probably won't start at $250 over here, but it'll still be substantially cheaper than its peers - whether sony's launch will cope remains to be seen. It may be that they end up making the bulk of their profits next year - a drop in PS3 price combined with a pre-christmas release of a major title (GTA/GT/some footie game etc) may cut their profits on the console itself (may, in fact, take them into loss territory) but will get plenty of units shifted so they can profit from licensing etc.