Wow! I just came across this on the internet. I've actually ordered something from this company through ebay, and was checking the status of my order (only problem ordering from Hong Kong is the delivery time!)
So, this company called Uxcell sell a watch which plays music, displays your photos and even plays videos! It has 2GB of memory, which is enough for a reasonable mix of the three (enough to keep you entertained on the train to work). And here's the best part, the whole thing costs under £36 (not including P&P of course).
I was so amazed that I just had to tell the world, OK, so the 6 people that read my blog ;)
Still, it doesn't compare to my GP2X. Games (old and new), movies, music...
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