Well, I guess you did not know about the HP Touchpad bargain a few weeks ago.
Next one could be the less interresting HTC Flyer.

I know that there's a $35 tablet that will enter the Indian market soon.

But cheap ass tablet market is a bit hard to explore, as you have so many options but never really know what you get.
Most of the time, specs aren't in line with what you get for user space, ram or even cpu...
You mainly get an android 2.x tablet, that will never be upgradable and have to pray it isn't full of bugs.

I did search for a while, there are fora for such devices, but since you have so many tablets, you never really get lots of testimonies per device. So you can't really tell the difference between someone trying to fool some potential buyers or real users talking about their experience with the product.

Hope it helps, even if it doesn't really answer your needs.
If you get more info about cheap ass tablets, feel free to share.

Edit:
I guess a second hand Ipad first gen would still be too expensive, or even a refurbished one.
A second hand Galaxy Tab would be a good idea, but it's too recent to have a bargain.