As well as releasing the new iPad, Apple also reduced the price of the 16GB iPad 2 to just £329 ($399). However according to information I have from Apple, that this is only availabel for this reduced price, for a very limited time.
This information was in a marketing e-mail about the new iPad.
The reduction in price is temporary and will be for a short time. So if you are thinking about buying the cheaper iPad 2, then you may not want to wait for very long and buy it now.
The other thing to consider is, because of this it doesn’t matter that the old iPad is called the iPad 2 and the new one is just the iPad, because before long we’ll only have the iPad and as the only iPad available it won’t matter what it’s called. Apple will just sell the iPad.