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We'll see if it's a bargain once the other tablets come out. I don't think it's much of a bargain, and if it was between the 600 dollar Xoom and the 500 dollar ipad, I would go with the ipad. If the Xoom was 450 off contract then I would consider it.$599 off contract, $399 with contract (2 year).
Motorola wants this to be cheaper than the IPAD. The cheapest model you can get from Apple is $499 (wifi). The IPAD was priced competitively, but I think competitors would except lower margins and could sell the same thing for $100 less. However, the significantly higher specs of the XOOM (wifi only) should bump it back to $500. Since the Xoom will not be wifi only at launch, the 3G (and later 4G) radios will have an extra $100 bump, bringing us to $600 ($599 to trick people). Since it will be higher priced than the cheapest IPAD, Verizon can play mind games with people and offer them it for $200 off on contract, make $399 seem awesome for this device (forgetting that a monthly data plan is required).
I for one still think this is a bargain at $599 off contract.