Raspberry Pi, a UK charity, has set out to build a $25 thumbdrive-sized PC that can run a browser and other utility software as well as 1080p video, with an HDMI output. The machines are intended for use in educational contexts, and need an external display (a TV or cheap tablet) for interaction.
128MB of SDRAM
OpenGL ES 2.0
1080p30 H.264 high-profile decode
Composite and HDMI video output
SD/MMC/SDIO memory card slot
Open software (Ubuntu, Iceweasel, KOffice, Python)