The good folks at CompuLab have released a new handheld for developers that can optionally run Linux. The EM-X270 Embedded Mobile Device features a XScale PXA270 CPU, 128 Mbyte SDRAM, 512 Mbyte flash disk, integrated Bluetooth and 802.11b, and a host of other goodies, including an optional 3.5" 480 x 640 VGA display with touchscreen. Prices are "starting from $122" but other than that I don't see any more pricing info, but well worth keeping an eye on.
Thu Aug 16 11:06:15 CDT 2007: detailed pricing located. It's around $305 for a single, base unit.
I've bought a number of their products over the years for work and I've never been anything but super-impressed with them. Very high quality stuff, excellent Linux support, highly recommended.