The only other devices with touchscreens are much larger than the Nano, and, from what I can tell, are generally at least $80-ish. They play video as well, which I assume is their primary feature.
you can try ebay, they might have a knock-off made in China. I bought a knock-off mp3 player from them before, basically it cost 1 cent but shipping was 25 dollars. The thing worked pretty good, I wound up selling it though once I got a real ipod.
Other than that I second the Sansa clip, it is cheap and works well, though nay on the touchscreen, for that u might be out of luck, at least for now.