Correction:

I called Amazon and checked their site again and found out that Amazon still has it for $279.99 and the price of $248.98 is from another seller called XP Passport. But they did tell me that if it dropped further at Amazon, they would give me credit for difference as long as it is within 30 days of ordering. That's why I love Amazon. Excellent customer service.

I checked Amazon website again after 4 hours of making the original post and the price of $248.98 from the seller called XP Passport no longer shows up in the list of sellers. Maybe N800 is sold out from this seller.
Also, circuit city website lists the price now as $299 (but out of stock) which makes me think that the retail price could have been dropped to compete with iPod Touch.

I also noticed that N800 has the top Amazon sales ranking among devices in its category so it must be selling well:
http://www.amazon.com/gp/bestsellers...007037-6427039

Why bother? Buy.com listed at $239. Apply their Visa and you knock another 30$. Did I mention free shipping as well?

Also, 10$ off if you use Google Checkout for the first time. I ordered it when it was $222, and it shipped yesterday. It's going to get here tomorrow, I can't wait =D.