The price drops are likely to make some price spacing for the newer 3G iPhones that are expected to drop later this year - perhaps with the tablets. The price cuts will also likely spur on iPhone sales which have either been good or bad depending on the week and the source. No specifics were given but the iPod Nano line might also be the beneficiary of decreased memory pricing and might see capacities double in size.
The new prices are expected to be:
8Gb iPod Touch $199 8Gb iPhone - $299
16Gb iPod Touch $299 16Gb iPhone - $399
32Gb iPod Touch $399