I don't know the details of the price, but since the original version, they've:

• Removed the Emotion Engine
• Removed the Graphics Synthesiser
• Removed 2 USB ports
• Removed the card readers
• Increased the number of Cell chips per silicon wafer
• Presumably improved the yeild from the blue laser manufacturing

Not to mention that increased volume on the Cell chip and the blue laser reduce per-part overhead cost. The PS3 definately costs a lot less now than it did at launch.