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Android tablets are getting better and better, and you have so much choice in terms of form factor, specs, etc. Some of the smaller ones aren't any more expensive than the more limited LCD ereaders, like the Fire and the Vox.
The Samsung Galaxy Tab is pretty well-loved. It's a 7-inch screen, so it's pretty small. You can get it for around $300.
For a cheaper option, my dad recently got a Dropad he likes, which is also 7-inch. I think it was around $200?
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