One thing I love about the iPaq is that you can download films which are ultra small in file-size because they are optimised for the iPaq display. I have a friend who has Fear and Loathing in Las Vegas which is only 52MB.
Oh, it is beautiful - you don't need a magnafying glass - everyone who has seen it has been impressed.
You are looking at it in your hand - so the field of vision it pretty good. You can certainly appreciate movie trailers. I doubt I would watch Gone with the Wind on it, but a good episode of the Simpsons would work.
I made a box on my 17 Inch Monitor while holding the ipaq up to it to see what it would match resolution wise - I got 279x197 and would guess that is within 5%.