Keith Leica do need to compete with the X100. Both are niche products in the same market, competing for the same consumers, only at slightly different price points. Leica can only justify such a price when (perceived) performance exceeds or meets their competitor's products. From what I can see so far, the X100 will far exceed the X1, and probably the X2. Fuji have managed to leapfrog Leica in this market segment.
I also believe that the X100 may even sway away potential M9 buyers initially, but will eventually push them towards an M10 down the track, when the interest in such rangefinder-esk cameras' popularity increases. I've never seen such a buzz about a digital camera yet, and yes the Leica M series has paved the way for Fuji to come in an grab a chunk of the market, but at the same time, highlight the usefulness of rangefinder-type cameras.