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Sorry to resurrect an old thread, but here's something small and relatively low capacity (flash memory) that does (limited) MPEG4 video on what is essentially the whole front of the device. Even uses the screen edges for the interface controls, though I wonder about that.

The Clix is pretty, small, and supposedly the UI is very good. But there's no way that 2GB is going to be enough for anyone, really. I really wish they had made it twice (or four times) as large, stuck a 1.8" disk in there, and made something really fantastic. As it is it's probably good for riding the subway/bus into work in the mornings, but I still don't think I'd want to watch anything on that small a screen for an hour.

There's also the Samsung Sansa e270, which has 6GB and is about the size of the Nano (though about twice as thick). That has the same screen size problems, but it has more disk space and uses Micro SD expansion. I'm still not going to get it due to its size.

At the moment I think I have three choices:
1) wait for Apple to finally get around to the damn video iPod, although I'll still have to grapple with the thought of using iTunes (I do so love mass storage devices)
2) get an Archos AV5100 (nickname for the 100GB AV500). I had the AV530, but even that was too small for me when I factored in the video with the music. The 5100 is much bigger, but I love the disk space.
3) the Toshiba Gigabeat S. It's a pretty good looking device, I must say. It's got a respectable 60GB drive, and an okay-sized screen (although 2.4" might be pushing it).
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Matt