Look, I'm sure Nintendo has these experts with their charts and graphs trying to come out with the perfect balance of supply and price to meet demand and make maximum profit.
Considering that the competition is going to be between like $100-$400 more, the Wii is already a deal, especially if people love it as much as the hype suggests. You're getting what could potentitally be the best console for a lot less, yet this Christmas I'm sure they could sell all of the Wiis shipped at $200 - twice as much as some people seem to be suggesting that they could charge.
Price drops are weapons used against the competition. Expect price drops on following Christmases, the release of major games for other consoles, about the same time as their price drops, etc. One day a new Wii might sell for $99 - but if they started at that price, they wouldn't be able to go much lower, now could they?
Again, I'd love to pick up a Wii for $99 if possible myself (who does want to pay more?), but Nintendo certainly shouldn't sell it that low this soon - the demand is there to be able to sell it for more and no company looks away from profit.