This is certainly an interesting move. My only guess is that the X700XT was simply a by-product of the then-developing 110nm process at ATi. Now that it seems they've got that manufacturing down pat, they're happy to discard the "red-headed stepchild," & move on to something a bit more competitive in that price range...

" Yep - the strategy seems to be to replace its X700XT – a competitor to NVIDIA's well received GeForce 6600GT – with a 12-pipeline RADEON X800 (possibly a RADEON X800 XL variant) featuring a 400MHz GPU core and 500MHz memory clocks, and ship it at an aggressive price-point, thereby enabling its AIB partners - such as Connect3D and GeCUBE - to supply to the channel at $249 or, probably, much less."