
I've had an ongoing conversation with several fellow hardware sketchers about good methods for prototyping interactive products with small screens and custom I/O. The hardware input side is taken care of by projects such as Arduino and Wiring; however, finding a suitable screen has been harder. For me, the ideal screen should be: high-resolution with pixel-perfect reproduction of source images, full-screen refresh at >10fps, able to display/mirror an arbitrary region of a desktop PC screen (so you can leverage any and all PC applications), wireless (for both communication and power), available in different form factors from 2"-8".
While the perfect match is still elusive, I've recently come across a useful solution that I wanted to share: DisplayLink screens.
DisplayLink uses USB to add multiple additional displays to a PC or Mac. These show up as regular additional monitors to the OS. Small screens can be USB-powered as well - so while they're not wireless, there's only a single cable. The first screens are just hitting (Japanese) streets now. I recently received a Century LCD-4300U - 4.3" diagonal, 800x480 resolution, bus-powered. These displays aren't cheap ($200) but very convenient. A larger 7" screen with resistive touch input (Mimo UM-740) is on order. Video playback is not a problem, screens a bright and crisp.
Other methods I've personally tried out that fall short(er):
Other approaches from friends: