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I second (third?) the recommendation for a used Clié. My daughter borrowed mine, on and off, for about three years, since she was ten. Her younger sister has used it some, but is less interested in the books. Both were happy reading on the small screen, and liked the option of having a few games available.
Older daughter is now thirteen, and I'm getting her a Jetbook as her 8th grade graduation present. I don't think I'd get one for a child as young as 8, or even 10, if money is a real concern; I'm not sure a child that young could understand the fragility of the device. This is even though they both have hand-held Nintendo DS things of some sort--those are fairly sturdy when closed, and my younger daughter (who is ten) is prone to leaving hers on the edge of the table where it sometimes gets bumped to the floor.
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