Smart move. They're lowering it aggressively below cost to compete with Sony's latest e-reader, figuring the revenues on e-books will more than make up for it.
Word on the street is the DX, while larger and higher-res, is a little ungainly to hold in your hand and nearly impossible to type on while you're holding it. The form factor of the Kindle 2 seems about right. I think it's about the right time to buy one of these.