"nominal price"?
I've seen the full retail box Windows XP Pro priced over $200 Cdn in the same computer shops in Toronto's Chinatown that were selling PCs for under $300 Cdn; when OS software can be 2/3 the price of [admittedly low-spec] hardware that can hardly be called 'nominal'.
Very few pay the full retail price for Windows. You can purchase an OEM copy much cheaper if you purchase some kind of hardware at the same time. However, $200 Cdn still seems a bit high.
Most home users also have no real reason to need XP Pro as opposed to XP home.
For a business, which is what XP Pro is targeted at, $200 Cdn is a nominal price. Consider if you have to have someone come in and take a look at that computer because you have a problem. How much are they going to charge? $45 to $60 an hour.
Think of all the things that operating system provides and how often you use it. Compare the one time fee for the OS to things like your cable TV bill.
Think about what other software costs. We just purchased VHDL design and analysis software for $40,000.
Software on a system almost always outstrips the cost of the hardware. Software gets updated much more often. Companies dump vast sums of money into developing software. They develop a product which they feel their customers will be willing to pay enough for that they can make a return on that investment even though they often spend a year or more developing the software before they can start selling it and getting a return on that investment.
PCs at that low of a price are usually somehow tied to a service or are being used to sell other products. The company takes a loss on the price of that product in order to make money selling another product, so when you hit those really low priced computers, you really aren't doing a fair comparison.
Microsoft spends huge sums of money developing, marketing, distributing, and supporting Windows. If you paid attention during the anti-trust suit, you would have noticed that Windows itself is far from a cash cow. MS doesn't make much money off of Windows, they make most of their money off of MS Office.
Microsoft was accused of underpricing Windows in order to prevent competition and that they way the developed Windows gave them an unfair advantage in the Office Productivity Suite market, which is why they were willing to sell it so low.
If you think Windows costs too much, you can try and use Linux to meet your computer needs. It's free.
Linux works extremely well for some things, and horribly for others.
In my experience in a lot of cases I could do what I wanted with Linux, but I had to spend a lot more time getting the system set up and working because I kept having to rebuild drivers for a particular kernel, and in some cases patch the kernel and rebuild the kernel.
For example. I think MythTV on Linux makes a better PVR system than Windows MCE. However, I had to spend a lot of time to get everything set up so that I had MythTV working correctly. I kept having to dig in and find out why commands in the step-by-step instructions failed and fix things.
If I have the choice of spending $100 or fighting with getting things working for hours every evening after work for a week and even then have some problems, that $100 price tag starts looking pretty good.
In my opinion things have gotten worse with Linux 2.6 kernels. Even kernel revisions used to be relatively stable, now there seems to be little difference between a development kernel and what is supposed to be stable.
Significant things are constantly getting changed in minor kernel releases.
Where I work we spend many times the effort supporting our drivers under Linux than we do under Windows.
Windows is a powerful tool, and for most people it's a bargain at it's price. If you disagree there's always Apple's OS Xor Linux as well as a considerable variety of less well known options. Pick the one that you feel is the best value for you.