My experience, as the owner of a FLGS (in Michigan, no less), is that inexpensive entertainment tends to get hit less during an economic downturn, but it still gets hit. People simply have less discretionary income. Some of the comments here and on the WotC thread include the idea that if 4e were somehow "hot enough," then Wizards could safely ignore the economy. That's simply nonsense. Well-run businesses are always looking ahead, both in terms of obstacles and opportunities.
I am a FLGS too, and I can concur most of that. The real issue for game manufacturers right now isn't the game stores and their end customers, its the source materials and distribution costs for those products. With the dollar's value taking a hit and raw goods manufacturers having issues, the cost of production is going up. I think this is one of the factors leading to D&D miniatures game being overhauled (and basically cut from production as we knew it).