The first thing that came to my mind when I saw this, was that the performance of Prescott vs Northwood should be about the same and that's why Intel prices are identical for the two chips. Now that I think about it, maybe it's not that simple. Intel probably WANTS to sell more Prescotts than Northwoods because they will be cheaper to produce, so by selling a $400 Prescott they get more money than selling a $400 Northwood. So, even if Prescott performs a bit faster than Northwood this still doesn't change the fact than Intel prefers selling more Prescotts than Northwoods, and if this means selling a better product at a lower price, that's what they will do.
Anyway, the point is that we will have to wait and see how Prescott really performs and THEN judge it. I have no problem admitting that I am an AMD fan myself and right now the way I see it, my next upgrade will be sometime next year when San Diego is released. On the other hand, Intel is a huge company. Whoever underestimates it is either ignorant or plain stupid. I am rather optimistic though that AMD will be able to respond to whatever Intel introduces, but I doubt Prescott will be a huge flop as many are implying.