So, current ToysRUs flyer has three different 7 inch kid tablets from three different manufacturers that look Android based. Note they come with 4GB storage (and it looks like no SD slot)! And there is a 10 inch Archos tablet for $179 (also only with 4GB but with an SD slot).
4GB is enough to download 100 Angry Birds type games. Plenty for a kid.
Best thing about them is that they're so inexpensive, you don't even mind if they get lost or broken.
And they can be re-purposed later: I have several that the kids and grandkids used to use all the time. Now that they're older, I gave them iPads and I use those old $100 Android tablets as dedicated Pandora and Scanner Radio devices on my desk. Kind of neat.