I have heard that it will be an 'extreme' cpu and these usually cost <$800. Do you guys think IB will be cheaper.
More aboutbridge cost
No, Ivy Bridge will be the replacement for the current Sandy Bridge CPUs and will likely cost the same. The "extreme" CPUs that you are thinking of are the Sandy Bridge-E LGA2011 CPUs that are going to be released later this year.
what will happen is that ivy bridge will be introduced and take sandy bridge processors place, then sandy bridge will then take a lower market price as it is old.