I can't comment on the processor as I only have a media player but I'm guessing the low power processor keeps costs down and battery life high. Still, I think if you want a media player, get a media player. if you want the Internet, get a web book. Crossing technologies into one product usually gives no advantages and all the disadvantages. But perhaps that's just me.
True, but that's exactly what Archos is doing. You have the 604 and I have the 604 WiFi, but these new models don't make any distinction, they're all "WiFi's," and they're being touted as internet-connected devices (I believe some will even have 3G in them).
I have not had the same experience with my 604, though. It went bad about 6 months ago, and keeps telling me there's no hard disk, so that's probably died. I don't have much of an inclination to replace the disk in it either.