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They should charge what the market can bear with regards to programs, but OS's, should be cheap. If MS is not careful, a lot of young people adopting the Apple Way will eventually eat at the bottom line for MS.

Well, MS didn't become M$ by selling operating systems cheap. ;-)

I do agree though that they should drop the price, but I don't know how much that would affect the young, future potential Mac buyers.
I mean, buying a mid-range PC with Win 7 preloaded is still pretty cheap, certainly a lot cheaper than a comparable Mac.
And even building your own PC and buying Win 7 is still a good deal...
Doing like I do, building my own high end PCs - even with the high cost of Windoze, I'm still getting a machine more powerful and about a thousand dollars less than something off the rack.

I mean, my current i7 PeeCee box cost me about $1500 to build, but would have cost probably $2500 to $3000 (or more) if I had bought something comparable from some place (and it would have had lower grade hardware, too, but that's a whole 'nother story), so if I have to spend another $300 for Win 7, no big deal.

And that's what their "standalone" and personal OEM and retail OS buyers represent - mostly those who build their own, since the majority of PC buyers are buying "off the rack" with Windoze preinstalled, where MS is not getting anywhere near that 300 bucks per machine.