Its not about competition, its about costs. There's no reason for ATi to drop prices on their R300 cores, they each fill a market segment that doesn't compete with their own products. Once competing products are released in those segments, expect the older parts to disappear, not sell for a markdown. There might be a 3-week span or so where leftover inventory goes on clearance, but I don't expect a widespread firesale and continued production of the older R300's. Fab lines once producing R300 will shift to R350, and the new parts will fill in the vacuum left from R300's discontinuation.
ATi hasn't been maximizing their profits on their R300 core having to fill much 2 much lower market segments with an expensive .15 part with 110 million transistors. The 9500 and 9500pro have recently met supply bottlenecks b/c of this, as ATi shifts its focus to the 9600/pro in the $150-$200 mid-tier market. The 9800pro takes the high end at $400, the $9700pro fills in the $300, and the variants (TX, OEM pro, non-pro) fill in the $200-$300 range. Once the 9700 variants are exhausted, and 9800pro yields improve, you'll see the 9800 non-pro's fill in the market segment vacated by the 9700 variants. If you want the best bang for the buck right now, I'd go for the 9700 non-pro.
Chiz