Like Calvin, I recently got a 7" tab (my first android experience) that runs ICS 4.0.3, 16Gb, with microSD card slot, dual-core, 1024 x 600 res, 2Mpx camera, capacitive touchscreen for $130 delivered. It has been a learning experience, but I'm liking it better and better every day as I get better at operating it.
Biggest drawback for me is a touchscreen for someone with essential tremors. I skip around a lot -
All this to say that a $199 'sale' price should put the Surface 9.7" right in the ballpark, imo. The right in-store display could pull customers away from the higher priced brands...