I just got my 15 year-old son a Motorola MpX-220 (his choice). Uses MiniSD to store video and audio files and he is really happy with it. It uses Windows Media Player for music and video files. Cool for kids
Personally, I would go for one of the Blackberry devices. Windows PocketPC, Outlook, IE, PocketWord, touch screen, the works. The lower-end models are comparable in price with the MpX-220 (it cost $149 after $50 rebate--I hate rebates!). Ultra-cool for adults
Dan