I saw a few great ideas on this forum, so I decided to create my own cover for my 650. I had a coupon for Borders, so I chose a French Ornate Midi by Paperblanks.
The original journal. I cut out the pages at the edges of the front and back covers and removed the "memento pouch" at the back.
After evisceration. To make the lining, I used "microsuede" fabric purchased from a local fabric store and 4 strips of 1/2" wide elastic. A product called "UGlue" (basically that rubbery stuff that holds inserts in magazines) was used to tack down the elastic after I got it positioned, and I glued the fabric to the backing using "Mighty Gemit" although any fairly thick fabric glue designed for embellishments should work. Just make sure that you have everything positioned exactly how you want it and that the cover will close before you glue anything - my first attempt used a layer of felt under the fabric for extra padding, but it was too bulky and the cover wouldn't close, so I had to (carefully) take everything out and start over.
Lining and elastic in place. I don't like the 650's stylus, so I've been using the one from my old Palm Tungsten. To make the stylus pocket, I just took a small strip of material and ironed it to form a little tube, then glued it into the spine. After everything was glued and UGlued, I weighted it down with several large books and let it dry for a few hours.
My 650 in its new cover! Yes, there were a few stray glue smears, but it helps to wipe away any excess around the edges with a cotton swab.
The finished project. The journal has a magnetic closure which I'm not terribly fond of, but I couldn't get it out without destroying the cover; it's not a very strong magnet, though, so I guess I can deal with it.