Target runs a little asus netbook for 199 (Windows 7 starter( now and then. You can do ebooks and outlook on it. Netbook might be a good choice for you if you can afford it.
You might look at
www.pandigital.com, the novel is a nice size and you can find refurbed ones around 100.
A cell would do what you want but is very small - tablets usually are 7 inch and up. There is a smartq v5 that is a little bigger screen (4.7 I think it is) Smartq has a ten inch model out now as well if you want something bigger. the v5 runs android 2.1 but I don't know about the ten inch.
You really don't need android market as Amazon has a market as well as slideme.com. There are a few programs they don't carry but there are bunches available. There are also free sites for apps on the net. I have yet to not be able to find what I wanted without android market (admittedly having market is a little easier and less time consuming but amazon market is just as easy if they have what you want).