The iToos M6HD PMP is capable of outputing 1080i via HDMI and the price is certainly right. It features a 4.3-inch TFT screen with 1360 x 768 resolution, 4GB of internal memory which is upgradeable via memory card, and the usual support for a bunch of codecs, including FLAC audio and H.264 video.

The retail price is just $58.50, but right now the only known online retailer selling it is Ownta for $87. Hopefully it will show up elsewhere for closer to $58.50.

This one is worth a look.

[Engadget]