Rocksmith: PS3 and XBox for $29.99 + free shipping
FYI: If you're interested in the Guitar and Bass edition, it's available for 59.99.
From Amazon:
Introducing the next stage in the evolution of the music game. Rocksmith, the first and only game where you can plug into any real guitar. Featuring gameplay that automatically adjusts to your personal ability and innovative game design that makes playing music visually intuitive, Rocksmith will engage experienced musicians as well as those who have never picked up a guitar in their life. You'll unlock mini games to hone specific skills. Every copy of Rocksmith will include a revolutionary 1/4 inch USB cable that turns the guitar's signal from analog to digital, allowing it to be played through video game consoles. By plugging into your console, you'll develop real skills and real styles while playing absolutely real music.
Don't think of this as a game, think of it as a guitar tutor with game elements. And make sure you have a REAL guitar already or you won't be able to "play" this. But it works, and it's fun!
Considering that the cable itself runs for $27 on amazon, this is probably gonna be as cheap as it gets.

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