Well, I can definitely speak for myself (and three other people in the UK) in that we've all been very interested in getting ebook readers for some time. I've lurked on Mobileread for months, but at $350 or even $250, the Sony Reader just didn't make sense. At $99 however, it's a very fair price - as one of my (student) friends said, he spent that at a cricket match in London yesterday.
I probably would've bought it at $150. $200, no.
It helps that the dollar is so weak, by the way
I bet that a lot of people buying the reader are from overseas.