The 40GB PS3 dropping to $299 is just a rumor and I doubt that it will happen. And Sony has denied the rumors.

The 40GB PS3 was just introduced in November last year and I think that it's too early for Sony to drop the price on it. I think that the 40GB PS3 may drop at least $50 dollars this summer, but I can't see a big $100 dollar price drop until this holiday season.