Cliff

It's a routine practice for console industries to sell their consoles for a loss. The way they make up for the loss is with game sales and developer licenses. Merrill Lynch (ML) estimated the production cost of the PS3 to about $800. Ken Kutaragi has said that it's going to expensive, but I really doubt that it will be above $500.
As for the price of the HDD affecting the price of the console:
A 60 GB HDD is like to candy to these guys, it won't have that big of an impact on the price.
To get good info about the PS3 visit http://en.wikipedia.org/wiki/Playstation_3

The $500 range for the PS3 is just a suggested retail price and is as of now, just speculation. Ken Kutaragi said that it will be expensive, but they will have to try hard to contain the price. Kaz Hirai also said that the PS3 will be expensive, but will be priced competitively with the Xbox 360. Right now the Xbox 360 with the HDD is selling for $400. I wouldn't be surprised if the PS3 would sell between $400-499.