$299 = XBox 360 Core Unit. And, strangly enough, there are people who buy the core over the bundle...
Aside from that, it seems a lot of people are interested in it because of the low price ($199 or under). A good example is over on CheapAssGamer.com, I posted a thread about the possible pending GCN Price drop to which there were multiple replies about just waiting for the Wii, since it'll play GCN Games and "with the Wii likely to be $200, the price difference isn't substantial enough to bother getting the budget console."