I seriously doubt that a PXA250 can handle video in in a bearable quality.
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Agreed.
Possibly you might try a usb cf adapter combined with a usb hardware mpge4 encoder.... plextor makes a coupke that work in linux (according to the mythtv people).
The problem there is that you are looking at $300-$400 usd for the hardware--more than the price of the device you want to attach it to, and still less useful attached to a 5x00 than it would be attached to a more powerful system.
Sharp (I think) makes a small handheld mpeg4 encoder, and maybe the archos has input/encoding?
Basically for the $$ spent you might look at a different handheld for the job.