PPC 970 can run both in 64-bit mode and 32-bit mode, and in 64-bit mode you can run both new 64-bit applications, and old 32-bit applications.
I expect the cost of the 970 to be quite reasonable myself - the processor is a spin-off of the Power4, the design is quite automated and quick, and the die size isn't that large. It shouldn't be much more than a fast G4 in price according to some people on Mac forums, perhaps even less if the yields are high.
So more $400 than $800, in my opinion.
