The GP2X Game System (GPX2) looks like a good cheap alternative to the video iPod offered by Apple, especially if you already have a 1Gb SD card lying around like me.
It’s got linux on it, plays lots of games emulators, has lots of video codecs, and easy to replace batteries with 2 AA’s if you’re out in the jungle and there happens to be a 7-Eleven nearby. It does not force you to use iTunes. On the downside it’s far from being a PSP and it does not have a built in hard-drive, so SD cards are an extra overhead. But it’s so cheap it would be a fun all-round toy.