Bah! For the same price, you can get a nicer Archos 32 (which iirc I first saw here on Woot). The Philips Gogear specs are virtually the same, but the Archos 32 adds a camera, USB Host, and video out. With minor effort, it made a decent Skype phone for my 8yo.
That said, this is kind of a sour spot in the market: Such a small screen is difficult for anything more than the most basic music player, and if the device supports apps, the kids want to use them. I ended up moving from a small-screen device like this to the more-capable Archos' 32, then their model 43. It's not fantastic, but the cheap & flexible Archos 43 is the everything-but-a-cellphone device that seems to keep getting used. (You get an iPhone-equiv wvga screen and A8 cpu, better sound, HDMI/hd vid out, microSD, an 720p camera for about $80 more than the A32 or this Philips Gogear.) It's worth it.
Also important: With the prevalence, nay, dominance of malware in the standard Android app market, its presence is actually a negative if you plan on buying this for a child. (Kid: "This tictactoe app wants rights to all network, email, phone, and sms? Sure, why not!!" [click-pwn!]) Archos does an acceptable job of filtering malware from its AppLib, and Amazon's market is an excellent option, but there's no way I would leave Google's standard App Market on a device for a kid. Another win for Archos' otherwise-middling products.