Not so bad?
While I also will be sticking with my "basic" archos 7 with 160gb of storage (if and when archos fix+return it, the thing packed up 2 weeks ago :<), it is worth bearing in mind that the increased storage would seem to be the 7's only real significant advantage.
While I have no immense love of android, it is much more flexible than the homebrew *nix flavour installed to the basic 7 so will open up much greater functionality than playing music+video, surfing, email, and playing flash locally.
The price is also pretty phenomenal for people looking for a new device, the archos site quotes £129 for the base model, at that price it's half a normal archos 7 (which has been on the market for over a year) while being able to do quite a bit more, barring store stuff. While that's a pretty big limitation for a travel media player, if this thing's aimed at living in the home, small amounts of storage and upnp streaming are all it needs. Pretty compelling for the price, imo.