Originally Posted by creampuff 
I may be the minority but I agree 100% with Ned's assessment. Pentax does not need a pared down low cost model. The approach to offer feature laden cameras that caters to varying photographic skill level is a sound approach applicable for the present.
While I may agree with you, the vast majority of buyers will look at 2 things: (1) megapixels; and (2) cost. I have yet to hear a sales person talk about the advantage of DOF preview and how it might be more useful than 2 MP's or having 'Canon' slapped across the body, as an example. And people who buy an entry level Nikon and like the results will stick with Nikon (as an example) when they decide to upgrade. By not participating in the entry level, Pentax is effectively eliminating potential relationships before they happen in a good number of cases.
Given the choice, I'd go for a K200D before a D60 or a Rebel XS, but someone who doesn't know what they're missing will save a few bucks and go for the most obvious "feature" (MP's or cost) whether it has a real-world advantage or not.
That said, Pentax have made their decision on how to approach the market and time will tell whether it's successful or not.