For a cheap 7 inch Android tablet, there is the Archos 70 Internet Tablet which is out in the shops. It has also just posted the update to Android 2.2. See here
http://www.archos.com/products/ta/ar...try=gb&lang=en
In France it is selling for 250 euros for the 8 GB version.
The problem with Archos is their timidness in moving sufficient stock. When they have a good thing, instead of selling millions like Apple, it is always out of stock because they haven't made enough of them.