To put on my serious-pants for a moment, I think the team should focus on the current Pandora. It's pretty cool, and they need to make some profit before messing with a new design.
If you want a less powerful console just go and buy any of the older hardware available. GP32, GP2X, Wiz, Caannoo, Dingoo, Geimei(sp?). THere's plenty of them out there including a ton of generically branded chinese PMPs too.
I think this idea is awesome! I reckon that also the 0.5 should be much bigger and chunkier, with an absolutely attrocious battery life, and it should run on C type batteries, six of them.
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