How about a 7" Archos for $200. Most reviews seem quite high on it so long as you are willing to tinker a bit (and, bun, I know you are) and don't expect to tether for 3G. Other issue is limited upgrade potential since only 256mb RAM. But sounds like current incarnation can run very smoothly, comfy to hold, and tv shows (at least downloaded ones) and video in general get very high marks. Also has good TV-out.