If you search this site, I think there was a mention a month or so ago that there are new Archos models out, but no new PocketDish models out yet (Archos makes the PocketDish brand too).
I have the AV700E (40 GB hard drive), which I need for my old eyes

, because it has the largest screen. I am very happy with it, and I have music and pictures stored on it as well as TV shows and movies. The AV500E would be better for a "pocket," but nice case and all the hardware comes with purchase.
Mine is sometimes particular about turning on. I don't think the battery seats very well. If it's not turning on, I put it on something flat, like a tabletop (rather than on a book or stack of paper), and it starts right up. Just a caution--I haven't heard that from anyone else. The battery life is excellent--longer than my portable DVD player, which can easily play 2 movies before dying. And hours and hours of music play.
Some of the people on this forum have said they didn't think the picture was very clear, as you did also, but I haven't seen a problem, and I think the picture is very good--perhaps my eyes aren't good enough any more to notice a differrence, but I do watch with my reading glasses).
I haven't recorded anything directly onto the PocketDish. I always just take what's already on my DVR. Music and photos I've copied from my computer.
Good luck. I hope I've helped.
Charise