At a recent meeting Scott Hall told us about a $4 Cypress ARM system that his work group intends to use with a port of  an ultra-lightweight Linux called uClinux. Coincidentally there was a recent blurb on Slashdot about uClinux on a Motorola 68k and here is the article, the related Youtube page, and one of the subsequent (in my opinion, classic) /. comments about this subject. The Slashdot article is here.