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I beleive you can access the market. But, the wifi will connect to the internet. You can download games from there no problem. But i do think you can still access the market. I mean, if a rooted nook color can, why not right?
i would say an unactivated DX would be right on par with a touch.Considering the battery life on the X I personally wouldn't think it would function very well as such a device...I would think an actual iPod Touch would be a better route...