I bought a Chinese branded (Greenhouse) portable player with a 7" screen for around Rs 9000 from JP 2 years ago. It supports a variety of movie formats including DivX and WMV; music formats like MP3, WMA and most of the popular picture formats. Has a remote control, TV-Out and audio outs so you can even hook it up to a regular TV and use as a standard DVD/DivX player. It can run on both main power and battery power. Battery used to last around 3 hours, but now it has dropped to 1 or 1.5hrs.
I think you can find something like that on eBay for around $100. If you only want to watch movies then there is no point in paying almost 4 times as much on a netbook.