XP Pro and Vista Ultimate are not priced much higher that your $129. I just bought a copy of XP Pro from Newegg for $139.
How is this possible?
Well, for one thing, you can't run Mac OS without a Mac, so Apple knows the software is going to a Mac.
To get a price break on Windows, you buy an OEM version, which is licensed to a specific motherboard. If you upgrade the motherboard, you have to make a phone call to MS.
If you pay the retail price for Windows you get a license that allows you to move the OS from one computer to another indefinitely.
This is the reason we don't use OEM pricing when comparing. That's for geeks, not for the unwashed masses who won't be able to get support (Microsoft says: Call your OEM). Anyway, Vista Ultimate OEM is still $180. Dell charges $150 just to upgrade to that from Home Basic.
OS X Super Duper Ultimate Version, price included with system, $129 to upgrade to a new version. That's less than going from Vista Basic to Ultimate OEM.
And there's one thing that's hard for Windows to beat. Many families have multiple systems in their homes. OS X family upgrade pack for up to five systems, $199.
Yeah, but only after (and to be totally accurate, if) Microsoft grants you permission by activating the install.
You legitimately paid for it. You're not pirating it. You still need to ask for permission to use it. This fact is what initially started me on my road from happy Win2k user to very happy Linux user.