Gameduino 3 has launched on Kickstarter. It is a 4.3" TFT with a very powerful FT815 controller, with touch, audio output and microSD card.
There are a lot of improvements over Gameduino 2, but the major new feature is video playback. The Arduino can play back .avi video files from the microSD card. With some carefully written SPI code, the Arduino can copy about 150 Kbytes/s from microSD to the GD3, which is enough for some pretty OK-looking video. There are a bunch of video demos in the link above - in fact everything in the video was created and rendered by an Arduino.
While games get everybody's attention, it's also really good for controls and indicators. The GD3 can run in all four orientations.
Price is $34 for 1. It will ship December 16th.
Thanks all - I'd be very interested to hear what specific problems people have with their displays, maybe see if GD3 plus the GD library can help.