I have been wanting to get one but am hesitant due to the cost of the games and movies.

Also, I was worried about watching movies on such a small screen.
Is it really possible to watch movies on it without straining your eyes?

I haven't had any problem watching movies on the small screen. And to be honest if the movie really holds your interest. You forget all about the small screen.

I got one for Christmas and I have to say I am very pleased with it. Games, music, movies and more, it has almost got it all :p. I've never had a problem watching a movie on it though the volume can be a bit low.