A simple DMM may be an option, that's getting a little analogue for me but maybe.
I've also added "logic probe".
As for the display, my first thoughts are to use a PC, with something like VB.NET you can do a fantastic UI. But then it's tied to Windows. WinDev looks pretty good but it's > $1000. I suppose there's Java but I've never liked the look and feel of Java apps. Maybe.
I like large GLCDs and I have a couple of 4DS ones with touch right here. Even a QVGA (240 x 320) is pretty small though and I worry that it would be too fiddly. If you look at the Xprotolabhttp://www.gabotronics.com/development-boards/xmega-xprotolab.htm
Great product but that display would drive me nuts. It's a lot smaller than 240 x 320 though so maybe the 4DS display would be OK. Straight up though that adds $80 to the cost.
As I write about it I'm leaning more towards a PC program, there's just so much more you can do. Maybe a combination of both, simple stuff like DMM display on an LCD, 1000's of bytes of serial trace data and analysis on the PC.