Here’s a video about an Android 2.2 Capacitive touchscreen phone based on Mediatek MTK6516 processor. By today’s standard, this processor is not very fast (460 MHz), but its price point allows for very low cost smartphones.
The Chinese smartphone in the video below only costs 565 RMB (around 87 USD) retail and features a 3.5″ capacitive touchscreen, GPS and a back camera. It seems to work pretty smoothly.However, it does not support 3G, so you’d only be able to use GPRS for data connections. If you wait a little longer, several sub-100 USD smartphones should be available on the market later this year with performance similar to Google Nexus One with processors such as ST-Ericsson U6715.